123s of Medical Weight Loss Clinics

December 12, 2019

The obesity rate continues to grow, and with it, so too does the competitive world of weight loss centers. What makes medical weight loss clinics stand out in this crowded field is the ability to prescribe medication. Along with pharmacotherapy, these clinics offer other non-surgical solutions, ranging from menu and exercise planning to counseling, all under the supervision of a physician. While these clinics can be lucrative, health care entrepreneurs should be aware of certain regulations before opening one. (See also: 123s of IV Therapy Providers).

In Texas, along with California and several other states, the “corporate practice of medicine” rule prohibits lay people or lay entities from employing physicians or offering professional medical services. Simply put, doctors can practice medicine, lay people cannot. The rule is meant to protect the general public from business owners more interested in income than quality health care, and its violation can lead to felony conviction. As the wellness sector expands, the line between business and medicine begins to blur. But to be clear, even non-invasive procedures offered at a medical weight loss center can be considered the practice of medicine, and as such, this prohibition applies.

This begs the question: how are entrepreneurs and other non-physician providers able to own medical weight loss clinics? The answer can be found through a tried and true legal model used in the health care industry – the management services organization (“MSO”) model. The following are a series of articles that shed light on the prevalence and basic inner workings of the MSO model: (1) 123s of Private Equity for DSOs and MSOs; (2) 123s of MSAs; and (3) Who Can Own a Med Spa: Unpacking MSOs.

Another major consideration in establishing and owning a weight loss clinic is staffing. Each state has differing guidelines, delineating who can provide certain medical services. For example, in some states it would be illegal for an unlicensed person to administer an IV or a Coolsculpting treatment (See also: 123s of Coolsculpting), a common practice at a weight loss clinic. But not all states specify what kind of licensing and training are required for someone who provides elective, non-invasive services. This absence can lead to confusion. Some states go in the opposite direction and provide additional guidance on supervision and training. In Texas, for instance, the Texas Administrative Code (“TAC”), Section 193.17, “Nonsurgical Medical Cosmetic Procedures” specifies those parameters. However, even 193.17 does not address all medical procedures that can be found in a medical weight loss clinic.

Medical weight loss clinics provide a necessary service within a multi-billion-dollar industry. However, these businesses are subject to stricter guidelines than the typical weight loss center. As with any health care-related business, there are certain regulations that need to be observed. For more information and guidance on compliance for a medical weight loss clinic, please schedule a consult at info@byrdadatto.com.

ByrdAdatto founding partner Michael Byrd

Michael S. Byrd

As the son of a doctor and entrepreneur, ByrdAdatto attorney Michael S. Byrd has a personal connection to both business and medicine.