The medical spa industry continues to grow rapidly across Colorado, with facilities offering everything from Botox to laser treatments to various types of IV therapy. Behind these aesthetic services lies a complex web of regulations that determine who can legally own and operate these establishments, and who can perform specific services. Understanding these laws is crucial for healthcare professionals looking to enter this lucrative market.
Regulatory Framework for Colorado Medical Spas
Colorado law classifies most med spa treatments as medical procedures, placing them under strict regulatory oversight. The Department of Regulatory Agencies (DORA) and the Colorado Medical Board establish and enforce these regulations.
Medical spas in Colorado must follow multiple regulatory layers, including:
- Colorado Medical Practice Act (physicians and physician assistants)
- Colorado Nurse Practice Act (nurse practitioners and registered nurses)
- Office of Barber and Cosmetology Act (cosmetologists and estheticians)
- Healthcare facility standards (DORA and the Department of Public Health and Environment)
Unlike some states with specific med spa licensing, Colorado regulates these businesses through existing healthcare and professional licensing frameworks. This creates complexity for owners and practitioners who must piece together various regulations in order to determine compliance requirements.
Corporate Practice of Medicine Restrictions
One fundamental principle governs med spa ownership in Colorado: the corporate practice of medicine doctrine. This legal concept allows only physicians and physician assistants to own a med spa that provides medical services.
The doctrine exists to prevent non-medical influences from interfering with physician judgment and patient care. For med spas offering treatments like injectables, laser procedures, and certain skincare services, this doctrine significantly impacts ownership options.
Colorado courts have consistently upheld this doctrine. The Medical Board can penalize physicians who enable corporate practice violations through “ghost ownership” arrangements where they serve as nominal owners while non-physicians actually control the business.
Authorized Ownership Structures Under Colorado Law
Given these restrictions, what ownership structures work for Colorado med spas?
Physician-Owned Professional Entities
The most straightforward approach involves physician ownership through:
- Professional Corporations (PCs)
- Professional Limited Liability Companies (PLLCs)
These entities must be wholly owned by licensed physicians or physicians and physician assistants provided the physician owns a majority share, and cannot include non-physician investors or owners.
Management Service Organization Model
The Management Service Organization (MSO) model offers a pathway for non-physician involvement. This structure splits the business into:
- A physician-owned professional entity providing all medical services
- A separate MSO handling non-medical aspects like marketing, facilities, equipment, and administrative staff
This bifurcated structure allows non-physicians to own the MSO while physicians maintain control over medical services. However, the arrangement requires careful structuring to avoid fee-splitting violations.
Medical Supervision and Delegation Requirements
Regardless of ownership structure, Colorado law mandates appropriate medical supervision for med spa procedures.
Medical directors play a crucial role in Colorado med spas. They must:
- Maintain active medical licenses in good standing
- Provide appropriate supervision based on procedure type
- Ensure proper training for staff performing delegated procedures
- Establish written protocols for all medical procedures
- Document delegation decisions
- Perform good-faith exams
Direct supervision (physician physically present) is required for certain high-risk procedures, while others may allow indirect supervision. The Colorado Medical Board evaluates supervision adequacy based on:
- Procedure complexity and risk
- Provider training and experience
- Established protocols
- Emergency response capabilities
Scope of Practice Regulations
Med spas must respect strict scope of practice boundaries for different practitioners:
Physicians may perform or delegate any medical procedure within their area of competence.
Advanced Practice Registered Nurses with appropriate training can independently perform many med spa procedures in Colorado, though collaborative agreements may be required for certain treatments.
Registered Nurses can administer injectables and perform many procedures under physician delegation but cannot independently practice or own a med spa.
Licensed Estheticians are limited to non-medical skincare treatments.
Violations of scope of practice rules can result in unlicensed practice of medicine charges, which carry significant penalties.
Regulatory Compliance Implementation
Setting up a compliant med spa requires systematic planning:
First, determine the appropriate business structure based on ownership considerations. Talk to a healthcare attorney familiar with Colorado’s specific requirements.
Next, create detailed policies and procedures that address:
- Delegation protocols
- Patient assessment requirements
- Informed consent documents
- Emergency response plans
- Staff training requirements
Finally, implement regular compliance checks. The regulatory landscape changes frequently, requiring attention to maintain compliance.
Avoiding Common Regulatory Pitfalls
Several issues frequently prompt regulatory scrutiny:
Fee-splitting arrangements between physicians and non-physicians often violate Colorado law when they involve sharing medical service revenue. This includes percentage-based compensation for medical services.
Inadequate supervision has led to numerous disciplinary actions. In 2024, the Colorado Medical Board disciplined six physicians for insufficient oversight of non-physician providers performing medical procedures in med spas.
Patient injury cases attract immediate regulatory attention. Proper training, clear protocols, and adequate supervision provide the best protection against these incidents. Patient injuries in med spas are on the rise and patients are becoming more educated about who can own a med spa, and whether their treatment was properly supervised.
Conclusion
Understanding Colorado’s med spa ownership laws requires specialized knowledge and careful planning. The corporate practice of medicine doctrine, scope of practice limitations, and supervision requirements create a complex regulatory environment.
Healthcare professionals considering med spa ownership should contact legal counsel experienced in this specific area. At Maureen West & Associates, LLC, we provide specialized guidance to healthcare professionals establishing medical spas in Colorado, helping them build compliant businesses while achieving their entrepreneurial goals.
Understanding these regulations from the start prevents costly restructuring and potential disciplinary actions later. With proper planning, healthcare professionals can successfully establish compliant, profitable medical spas in Colorado’s growing aesthetic market.
