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Hospitality Law: Hotel spas — Illegal practice of medicine?

Author of www.HotelLawBlog.com
12 October 2006
Is your hotel spa practicing medicine without a license?

Mixing a spa with a hotel is not new. Spas are one of the fastest growing hotel amenities, and according to the latest PricewaterhouseCoopers study, approximately 40 percent of luxury and upper-upscale lodging projects under development in the US have spa facilities and services, compared to 27 percent of existing luxury and upper-upscale hotels that have spa facilities and services. But spa proliferation and consumer demands pose new legal problems for the owners and operators of spas and affiliated hotels or other properties.


“This is a dramatic trend reflecting the lifestyle appeal of hotels to an increasing number of business and leisure travelers,” says Bjorn Hanson, Ph.D. and principal, Hospitality & Leisure practice, PricewaterhouseCoopers. Developers have found that including a spa facility in a hotel offers them a way to differentiate their properties, while tapping into a new source of revenue.

So, what’s new?

What is new is that some hotel spas are now offering medical cosmetic services — such as the injection of Botox® and the use of lasers to remove spider veins and tattoos — under the supervision of a physician.

The number of medical spas that offer these kinds of medical treatments (in addition to the standard massages, facials and non-medical treatments) has grown 133 percent nationally in the last five years, according to the magazine, Healing Arts Guide. How many medical spas are housed in hotels or mixed-use resort properties is not known. What we do know is that there is a growing demand for these services by spa guests, and many savvy hoteliers are responding to that demand.

Why you need the lawyers . . .

Medical spas, however, can involve complex and problematic legal issues. Violations of the myriad of applicable laws that regulate medical treatments can jeopardize medical, cosmetology and other licenses; incur fines; and even risk criminal sanctions.

My partner, David Kalifon, who is a licensed physician in addition to being a licensed attorney, is familiar with the issues surrounding medical spas. He helps spa and fitness clubs owners to structure their medical spa businesses lawfully and to operate them so they are continue to achieve compliance with all applicable laws. According to David, the primary concerns that must be addressed are as follows:

  • Licensing by several state agencies
  • Prohibitions against kickbacks, certain types of referrals, fee splitting and the corporate practice of medicine
  • Avoiding “aiding and abetting” the unlicensed practice of medicine
  • Appropriate supervision of nurse practitioners and other paraprofessionals
  • Compliance with HIPAA and other laws regulating the confidentiality and security of confidential medical information.

Despite the complex laws that govern the practice of medicine in spas, these concerns can be met reasonably and thoroughly with the help of experienced hotel and health care attorneys. Experienced professionals can help hotel owners and operators to structure the medical spa’s operation properly at the outset, and can assist in implementing procedures that achieve and maintain ongoing legal compliance.

The hospitality business is all about the guest’s experience. Hotels that respond to their spa guests’ desires by offering medical cosmetic treatments can do so legally, ethically, and profitably. It’s a trend to watch.

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David R. Kalifon is a health care lawyer at JMBM who practiced medicine for more than a decade before becoming an attorney in 1988. He has significant experience in the variety of relevant legal issues involving medical spas, including spas owned and operated by non-physicians and housed in hotels and mixed-use developments. For more information about structuring and operating medical spas, contact David Kalifon MD JD at 310.785-5311 or dkalifon@jmbm.com.

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Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.

Jim Butler is one of the top hotel lawyers in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done.

Jim is frequently quoted as an expert on hotel issues by national and industry publications such as The New York Times, The Wall Street Journal, Los Angeles Times, Forbes, BusinessWeek, and Hotel Business. A frequent author and speaker, Jim’s books, articles and many expert panel presentations cover topics reflecting his practice, including hotel and hotel-mixed use investment and development, negotiating, re-negotiating or terminating hotel management agreements, acquisition and sale of hospitality properties, hotel finance, complex joint venture and entity structure matters, workouts, as well as many operating and strategic issues.

Jim Butler is a Founding Partner of Jeffer, Mangels, Butler & Marmaro LLP and he is Chairman of the firm’s Global Hospitality Group®. If you would like to discuss any hospitality or condo hotel matters, Jim would like to hear from you. Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.