banner ad
banner ad

California Bill could Put non-Physician Owned MedSpas out of Business

April 16, 2008 |


(Submitted by Norman C. Davis, Esq.)

The Business & Professions Committee of the State Assembly held a bill hearing on April 9, 2008 at which time the proposed AB 2398 (Amended April 1, 2008) was presented to the Committee. Unfortunately, following a brief discussion and only a few minor changes made, the bill was approved by the Committee.

An amended draft of the bill was drafted on 4-10-08 and was approved by the Assembly Judiciary Committee on April 15th. The bill will now go to the full Assembly where it must be approved prior to May 31, 2008 in order to be sent to the Senate or it will die. Refer to the current attached draft.

This legislation is sponsored by the American Society for Dermatologic Surgery, and if passed will have a monumental impact on physicians, nurses, NPs , PAs and management companies involved in the aesthetic field. Physicians who are involved in aesthetic practices on a part-time basis must be on-site, providing direct supervision of delegated procedures, and must personally provide good faith exams on all patients prior to delegation. RNs will not be allowed to perform any procedures without the physician on-site unless the treatment is performed in a physician owned office with certain restrictions.

Of great note included in this bill is the severe scrutiny of lay, corporate owned entities, or management companies, that manage “medspas”, which would deemed to be the “owners/operators” of the practice in violation of the “corporate practice of medicine prohibition.” Entities in violation would be subjected to extreme penalties and even prison time. Physicians supervising aesthetic practices conducted in these entities would also risk penalties and loss of licenses.

Due to the nature of the enforcement of this legislation the Medical Board must opine on its position regarding passage. An important Board Meeting of the Medical Board will be held on April 25, 2008 from 9:00am to 1:00pm to review this amended bill. This meeting is open to the public and opposition will be heard; the location will be the Convention Center 1400 J. Street, Sacramento. Attendance at this meeting and opposition voiced by those concerned is vital, especially nurses and physicians who realize the real patient safety issues involved.

Companies and individuals involved in aesthetic practice operation and/or management must assume an immediate and aggressive opposition to this bill; the consequences of passage, even with significant modification would be disastrous. Letters of opposition, especially sent from your physician and nurses on office letterhead, should be faxed and mailed immediately to the below contacts:

Assembly Members

Assembly B &P Committee

P.O Box 942849

Sacramento, CA 9429-0049

Karen Bass, Majority Leader (916) 319-2147

Mike Eng, Chair (916) 319-2149

Ross Warren, Consultant (916) 319-2149

Alan Nakanishi (916) 319-2110

Judiciary Committee

David Jones (916) 319-2188

Medical Board

2005 Evergreen St. (1200)

Sacramento, CA 95815

Chief of Legislation Linda Whitney (916) 263-2387

You can follow the status of this bill on the legislative website (

This is an extremely time sensitive matter and your personal involvement is important.

Norman C. Davis, Esq.
2677 North Main Street
Suite 930
Santa Ana, California 92705-6632
(714)835-3227 (Fax)

About the Author (Author Profile)

Comments (6)

  1. sarita sigmon

    As an owner of a spa in North Carolina, I would like to share my horror story with you. I have been a licensed aesthetician for over 20 years. I decided to take the clinical approach and obtained all certifications for providing these services to the public(2 years ago). I then becam certified in laser applications through the Allied Health Association as well as achieved company certification on each laser I used. I sent copies of my certifications to the NC Medical Board and received in writing a “go ahead ” from their board attorney. I found the physician i wanted to work with and we proceeded to do business. That was until the board all of a sudden decided to “take the position” that aestheticians could no longer perform laser treatments with class 3 devices. Now, physicians that were performing these services were employing simple technicians that they taught themselves and no one said anything to them.
    Even though it was only their”position” and not a law, I could have pushed them further, but I am not one to go against policy especially where the medical board is concerned.
    Let me add that the physician that certified me (at the cost of $1000.00) on the V-Beam laser was the one that caused me so much trouble and used me as an attack practitioner to “scare” others from proceeding further. She is a D.O. and has turned her practice into a laser clinic. She is on several commities on the medical board and has a lot of influence. I questions her ethics in this situation.
    All that said, though I keep getting the response that laws must be made on a state level, I feel it is time for aesthetics to make a stand . I know my practice is limited not having a physician to work with, and I will not go outside my licensing. I recognize that physicians are the only ones that should diagnose a skin disorder, but I still do no know where they achieved their knowledge and expertise in “skin care”. That is the aestheticians role in the cosmetic field. I also know RN”S and Practitioners are not knowledgeable in that area unless they have received their Aesthetics License.
    It is time to address these concerns on a National Level. We need to work together (physicians, RNs, practioners, and aestheticians). If making professional decisions that has the “publics best interests” in mind, then we will achieve this level of professional courtesy. My concern is that the medical field has jumped a wagon for quick cash flow and has their eye on that goal more than what is best for the public—as has been proven by misuse of injectibles and lasers at the hand of physicians.
    I would love to be a part of seeing this problem solved. Please let me know how I can help.
    Sarita Sigmon

  2. admin

    Hello all,

    I spoke at this meeting today with several other physicians, many nurses, Norm Davies, and a few other attorneys. it went very well! The medical board changed their “support” position on the bill to a “watch” position after hearing public opinion. the decision was made to incorporate a cooperative input from the nursing board, and to take a look at accreditation and education requirements. It was quite a success! half of the board members stated that they now opposed the bill as is, and would like to see both education addressed, as well as the issue of corporate medicine.

    It does appear that the corporate medicine section of the bill has significant support by all board members, and I do believe that portion will remain with minimal changes, if any.

    We were pushing for education requirements, regulation, and more autonomy for nurses. I believe the violations of corporate medicine are the true targets of this bill.

    SO all in all it was a success, but there will be more to come!

    Dr. CR

  3. CA Consumer

    I really have to question Mr. Davis’ ability to interpret the law and the advice he is dispensing –

    It is ALREADY ILLEGAL for non-physicians to own a medical practice (ie. a MedSpa) in California. AB 2398 helps with enforcement by increasing the penalties and allowing for criminal prosecution for repeat offenders.

    In California physicians must own the controlling interest in a MedSpa. Other licensed medical professionals can own a lesser percentage (nurses, PAs, etc.) but laypersons (non-licensed) cannot own even a single share or percentage. Corporate chains are barred from owning medical practices. Lack of enforcement by the Medical Board has allowed many to operate in violation of the law – but the Medical Board has recently made it known that they will make a concerted effort to start cracking down.

    All of these regulations are available from the Medical Board at:

    This bill does not call for on-site supervision. It says that if a physician is delegating a cosmetic medical procedure to a nurse that he/she must make a good faith first examination of the patient (reinforcing what is already spelled out in scope of practice regulations – remember these are non-emergency, scheduled procedures). Treatments done after this examination do not require on-site supervision. It also reasonably limits a physician to supervising no more than four clinics which all must be within a reasonable proximity to each other.

    A lot of misinformation has been spread about this bill. This is a patient safety issue.


  4. admin

    Here are the official support/oppose comments to the Bill AB 2398:

    The sponsors of this bill, the American Society for Dermatologic Surgery Association, write: “Alternative patient treatment sites, often advertised as medi-spas,” have become a major, and often misleading, presence in the medical cosmetic skin care field – a phenomenon witnessed before a series of 2007 joint Medical Board of California (MBC) and Board of Registered Nursing (BRN) hearings regularly referred to as an “industry” serving “clients.” They may be freestanding locations, or are routinely located in potential high-volume locales such as shopping malls or centers.

    “AB 2398 describes supervision standards for doctor-owned cosmetic medical procedure settings. Prior patient requests for direct supervision of procedures or treatments would be required to be honored with physician supervision. The bill limits to four (4) the number of doctor-owned facilities that may be
    supervised by any one physician. And the bill specifies a radius between such facilities expressed in the form of time required to reach an owned facility to exercise supervision. Emergent patient circumstance response time is set at 24-hours.

    “AB 2398 drops the enforcement hammer most heavily on corporate entities, and those that facilitate their unlawful invasion of the practice of medicine. ASDSA believes that this accomplishes the goal of strengthening enforcement of current laws and going after the most frequent and pernicious offenders (i.e., unlawful, corporate-owned, chain med-spa operators) who want to practice medicine without proper licensure or ownership structure.”

    Support if amended . The California Society of Plastic Surgeons (CSPS) writes: “CSPS believes stronger penalties are needed to address many of the problems that have arisen with the growth of facilities referred to as “medispas.” These “medispas” often offer a wide range of elective cosmetic procedures including
    laser hair removal and botox injections. Although we support stronger penalties we believe that permanent revocation of a physician’s license is too strong of a penalty, given the infraction.”

    Pure Med Spa writes: “AB 2398, as amended, limits the elective cosmetic services provided to our clients by directly limiting the scope of practice of medical professionals. Our highly trained team of professionals includes medically trained and accredited physicians, nurses and aestheticians. Under this bill, registered nurses, physician-assistants and nurse practitioners would no longer be able to provide the direct services that they have been rigorously trained to perform.

    “Under current practice, a patient seeking a treatment is met by a nurse to determine a course of treatment and review of medical history. If there are any red flags with the medical history or any other potential problems, a physician is brought into the consultation. Once resolved, a treatment may be booked or the
    client will be turned away from service. This protocol applies to all procedures including injectables and laser hair removal.

    AB 2398 would require a physician to perform an initial examination of any patient before allowing a registered nurse to perform his or her duties. We do not disagree with the bill’s policy to afford a patient direct supervision by a
    physician upon request.

    “AB 2398 would also impose an unreasonable requirement that supervising physicians oversee no more than four treatment locations. It is unreasonable to limit the scope of what a supervising physician views as appropriate medical supervision as he or she will consider numerous factors in making this determination. As an example, such factors may include the types of elective cosmetic procedures offered, the number of clients, their usage of procedures and the specific procedures requested by these clients, and the number of staff and their qualifications. Our current practices and protocols provide the
    utmost in patient safety.”

    Norman C. Davis, Esq. an attorney who represents physicians, nurse practitioners, registered nurses, medical management companies and manufacturers of devices in the medical aesthetic field, writes: “The potential penalties proposed per violation in AB 2398 are outrageous, and the possibility of enforcement totally impractical. This bill is nothing more than an attempt by certain physician specialty associations to protect their “trade” by eliminating competition. One such association member of the ASDA, in a letter on March 3, 2008 stated that “the passage of AB 2398 targets the invasion of the practice of
    medicine by corporate profiteers.” Patient safety is but a minor issue in this matter when the bill is carefully scrutinized.”


    American Society of Dermatological Surgery Association (sponsor)
    California Society of Dermatology and Dermatologic Surgery

    Norman C. Davis, Esq.
    Pure Med Spa

  5. admin


    Submitted by Norman C. Davis, Esq. (5-8-08)

    As you are aware, the State Assembly Business & Professions Committee and the Judiciary Committee approved AB 2398 (Amended April 22, 2008). Following the Medical Board’s non–approval of the bill on April 25th, the bill was completely amended as of May 1, 2008 and forwarded to the Appropriations Committee. At the Committee meeting yesterday (May 7th), I was the only person or organization speaking in opposition; and unfortunately the bill was passed. Next the bill will soon go to the full Assembly where it must be approved prior to May 31, 2008 in order to be sent to the Senate. You may refer to the currently amended drafts of the bill and status on the legislative website (

    If passed, the revised bill will have a monumental impact on physicians, nurses, NPs , PAs and management companies in the aesthetic field in any business relationship where the practice is deemed to be owned or operated by a “business organization.” Essentially summarized, a business organization that offers to provide elective cosmetic medical procedures in violation of the Medical Practice Act (“Corporate practice of medicine prohibition”), and employs or contracts with a physician to facilitate the procedures will be guilty of knowingly making a “false or fraudulent claim,” a felony violation of the Penal Code 550, punishable by imprisonment in state prison for two to five years and fine not to exceed $50,000. There is no definition of the standards applied to a “business organization,” thus any potential relationship other than the total, traditional ownership of an aesthetic practice by a physician could potentially be deemed to be in violation.

    Inasmuch as many aesthetic offices are nurse/physician owned, or managed by non-professionals or management companies and are too small to effectively lobby in opposition to this legislation, I have been formed “California Medspa Management Association,” an Unincorporated Association to pool resources to cover expenses in this vital effort. . The purpose of the association is to support the legal and lobbying efforts of this proposed bill and potentially other legislation affecting the field. Since the formation several concerned physicians, nurses, management companies, and device manufacturers involved in the aesthetic field in California have contributed initial funds We will form a governing board and draft guiding principles soon, however, we need to start immediately to secure funds for support during the month of May, and thereafter if the bill is approved in the Assembly by May 31, 2008.

    We have contracted with California Advocates, a Sacramento lobbying firm, for assistance, and have joined with other regulatory and legal experts to coordinate immediate efforts. In order pay for expenses and fees funds are urgently needed. We are therefore requesting that those interested in this effort become members of the association and providing initial funding. Members will be kept abreast of legislative status and advised regarding their specific opportunity to become personally involved in opposing the passage. The following membership fee structure has been implemented:

    Individual RNs, NPs and physicians $500.00
    Single site aesthetic offices $1000.00
    Multiple site management companies $2500.00
    Device manufacturers $2500.00

    In the event need of an extensive opposition campaign, additional contributions will be requested. Should you decide not to be involved, please advise by email and your address will be removed.

    Thank you for your personal commitment and involvement. Please email your agreement to become involved in this effort and forward funds to:

    California Medspa Management Association
    C/o Norman C. Davis, Esq.
    2677 N. Main St. (930)
    Santa Ana, CA 92705-6632

    Norman C. Davis, Esq.
    2677 North Main Street
    Suite 930
    Santa Ana, California 92705-6632
    (714)835-3227 (Fax)

  6. admin

    Here is a summary on the latest, from the June 9th hearing:

    Arguments in Support. Supporters including the California Society for Dermatology and Dermatologic Surgery, Osteopathic Physicians & Surgeons of California and the California Society of Plastic Surgeons indicate that this bill offers an appropriate penalty for physicians who knowingly allow their names to serve as a “front” for a corporation that operates medical spas. The California Medical Association points out that this bill strengthens current enforcement laws and establishes the distinction between lawful, physician-owned and operated settings and corporate offenders.

    Arguments in Opposition. The California Medspa Management Association indicates that management companies, nurses, and physicians in the aesthetic medical field will be severely impacted and possibly close or lose their businesses as a result of this bill. The International Medical Spa Association, a medical spa trade group, indicates that this bill restricts access to services, and could potentially drive up the costs of cosmetic procedures for consumers. In addition, the Manufacturers of Equipment for Light-Based Aesthetics (MELA), a trade association of manufacturers of laser and intense pulse light devices for aesthetic skin care services, states that this bill is broad and vague, and believes that proper training for all users of light-based cosmetic devices is the key to ensure safety regardless of facility ownership. Numerous individuals, including physicians, nurses and nurse practitioners, and individually owned medical spas indicate that this bill will severely impact many small businesses in California.

    Policy Comments. This bill authorizes the revocation of the license of any physician and surgeon who practices medicine with a business organization in violation of the prohibition against the CPM. However, existing law specifies that the violation of the prohibition against CPM constitutes unprofessional conduct. Is the penalty contained in this bill appropriate for the violation? Is it more appropriate to declare that such a practice constitutes unprofessional conduct for the physician and surgeon?



    American Society for Dermatologic Surgery Association
    California Academy of Eye Physicians & Surgeons
    California Medical Association
    California Society of Dermatology and Dermatologic Surgery
    California Society of Plastic Surgeons
    Osteopathic Physicians & Surgeons of California


    California Medspa Management Association
    International Medical Spa Association
    Manufacturers of Equipment for Light-Based Aesthetics
    Numerous individuals & medical spas

    more information on the hearing

    more information on the bill

banner ad
banner ad