An MSO structure separates the medical practice from the business operations. Here's how it typically works:
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Medical entity (PC/PLLC): Owned by a licensed physician. This entity employs or contracts with medical providers and is responsible for all medical decision-making, patient care, and clinical operations.
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Management entity (MSO): Owned by the non-physician entrepreneur. This entity handles non-clinical functions like marketing, HR, billing, equipment leasing, and facility management.
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Management Services Agreement (MSA): A contract between the two entities that defines what services the MSO provides and how the MSO is compensated (usually a percentage of revenue or a flat fee).
When structured correctly, the MSO model allows non-physicians to profit from med spa operations without violating CPOM, because the MSO isn't practicing medicine, and the physician retains full control over clinical decisions.
Common ownership mistakes:
Even with an MSO structure, non-physician owners often make costly errors:
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Physician ownership lacks meaningful control: If the physician has no real authority and the non-physician makes all decisions, regulators may consider this a CPOM violation.
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MSA terms create financial dependence: If the MSO takes such a large percentage of revenue that the medical entity is left financially dependent, regulators may view this as indirect control of the medical practice.
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Non-physician makes medical decisions: If the business owner dictates treatment protocols, hires clinical staff, or overrides physician judgment, that's a CPOM violation regardless of how the entities are structured.
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Commingling of funds: If the MSO and medical practice share bank accounts or fail to maintain clear financial separation, this can undermine the entire structure.
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Failure to document the relationship: Without a properly drafted MSA and clear operational boundaries, regulators may collapse the two entities and find a CPOM violation.
If you're a non-physician who wants to own a med spa in a CPOM state, you need an attorney experienced in healthcare law to structure your business correctly.
Can an Registered Nurse or Esthetician Operate a Med Spa Independently?
Can a Nurse Practitioner Own a Med Spa Under CPOM?
CPOM States
Non-CPOM States
Non-physicians cannot own the medical practice itself. However, they can own a separate management company (MSO) that provides administrative and business services to a physician-owned professional corporation (PC) or professional limited liability company (PLLC).
Non-physicians may be able to own the medical practice directly, but they must still comply with scope-of-practice, supervision, and fee-splitting laws.
It depends on whether your state allows NP independent practice, and whether NPs are treated like physicians under CPOM.
Nurse practitioners occupy a unique position in med spa ownership. In some states, they have full practice authority and can own medical practices. In others, they're still considered mid-level providers and are subject to CPOM restrictions just like non-physicians.
Independent Practice vs. Supervised States
States fall into three categories regarding NP practice authority:
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Full Practice Authority (FPA): NPs can diagnose, treat, and prescribe without physician oversight. Examples: Arizona, Oregon, Washington, New Mexico, Montana.
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Reduced Practice Authority: NPs can practice independently but must have a collaborative agreement with a physician. Examples: Pennsylvania, Michigan, Wisconsin.
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Restricted Practice: NPs must work under direct physician supervision. Examples: California, Texas, Florida, Georgia.
In FPA states, NPs are often treated similarly to physicians for CPOM purposes and may be able to own a medical practice, including a med spa. However, this isn't guaranteed, state medical boards may still require physician ownership or supervision for certain high-risk procedures.
Whether NPs are treated like physicians under CPOM:
This varies by state. Some CPOM statutes explicitly allow NPs to own medical practices if they have independent practice authority. Others do not. For example:
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California: Even though NPs can practice independently in some settings, CPOM still generally requires physician ownership of medical practices, including med spas.
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Arizona: NPs with independent authority may own medical practices, including med spas, as long as they stay within their scope of practice.
Ownership vs. Control Distinctions:
Even in states where NPs can own a medical practice, there are often limitations:
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Scope-of-practice restrictions: NPs can only perform or supervise treatments within their scope. If your med spa offers procedures that require physician oversight (such as certain laser treatments or deeper chemical peels), you may still need a supervising physician.
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Medical director requirements: Some states require a physician medical director even if an NP owns the practice.
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Employment restrictions: In some states, NPs cannot employ physicians, which can limit the types of services your med spa can offer.
Common Misconceptions:
Many NPs assume that because they can practice independently, they can own and operate a med spa without restrictions. This is not always true. Common mistakes include:
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Assuming independent practice authority equals the right to own any medical business
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Offering services outside their scope of practice without physician supervision
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Failing to verify whether their state treats NPs as exempt from CPOM
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Not understanding that CPOM and scope-of-practice are separate legal issues
If you're an NP considering med spa ownership, consult a healthcare attorney in your state to determine what's allowed under both CPOM and scope-of-practice laws.
If you're an RN or esthetician, you have options, but you need to structure your business correctly:
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Work as an employee or contractor: You can work in a physician-owned med spa or a compliant MSO structure.
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Partner with a physician: In some states, you can co-own the business through an MSO model, where the physician owns the medical entity and you own the management company.
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Operate a non-medical spa: If you offer only services within your scope of practice (facials, basic peels, non-laser treatments), you may be able to own and operate independently. However, you cannot offer injectables, lasers, or other medical-grade treatments without physician oversight.
The key is to understand the legal boundaries of your license and to ensure that any physician involvement is real, documented, and compliant with state law.
Legal Disclaimer
This content is for general informational purposes only and does not constitute legal, medical, or financial advice. Laws and regulations vary by state, and readers should consult qualified legal and healthcare professionals before making business or clinical decisions.
No, not legally in most states.
Registered nurses and estheticians are frequently the face of med spa operations. They perform treatments, consult with clients, and manage day-to-day clinical flow. But here's the critical distinction: performing treatments under supervision is not the same as operating a med spa independently.
Scope-of-Practice Limitations:
Both RNs and estheticians have defined scopes of practice that limit what they can do without physician oversight:
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Registered Nurses (RNs): Can administer injections, perform certain laser treatments, and conduct medical procedures, but only under physician supervision or delegation. RNs cannot diagnose, prescribe, or make independent medical decisions in most states.
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Estheticians: Licensed to perform non-invasive skin treatments like facials, microdermabrasion, and basic chemical peels. In most states, estheticians cannot operate lasers, inject Botox or fillers, or perform medical-grade treatments without supervision.
When we say "operate independently," we mean owning the med spa, making medical decisions, determining treatment protocols, and supervising other staff. This requires a medical license (physician, NP in some states) or a compliant ownership structure.
Why do nominal physician oversight structures carry compliance risk?
One of the most common compliance violations in the med spa industry is the "silent physician" model. Here's how it usually works:
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An RN or esthetician wants to open a med spa but knows they need physician involvement.
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They find a physician willing to act as medical director, often in exchange for a fee or percentage of revenue.
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The physician signs off on protocols, provides nominal oversight, but is rarely on-site and has no real authority.
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The RN or esthetician makes all operational and clinical decisions.
This is a CPOM violation in most states. Regulators call this a "sham" arrangement because the physician is not truly in control of medical decision-making. If the state medical board investigates, both the physician and the nurse/esthetician can face discipline, including:
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Loss of professional licenses
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Fines and penalties
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Cease and desist orders
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Civil or criminal liability
The physician may also be personally liable for any malpractice or adverse events that occur under their name, even if they weren't involved in the treatment.
What Registered Nurses and Estheticians can do Legally
Common Regulatory Red Flags
State medical boards and nursing boards look for certain warning signs when investigating med spas:
Compliance Risk Indicator
Description
Physician is rarely or never on-site
If the medical director only appears infrequently (or not at all), this may raise regulatory concern regarding the adequacy of clinical oversight.
Non-physician makes hiring decisions
If an RN or esthetician hires or terminates clinical staff without physician involvement, this may indicate improper allocation of clinical authority.
Non-physician makes hiring decisions
If a non-physician determines which medical services are offered, how treatments are performed, or what products are used, regulators may view this as improper control over medical decision-making under CPOM principles.
Non-physician makes hiring decisions
If the physician receives a flat fee but lacks meaningful decision-making authority, regulators may scrutinize whether the arrangement reflects genuine clinical control.
Non-physician makes hiring decisions
If marketing materials suggest physician-supervised care that does not reflect actual physician involvement, this may present advertising and regulatory compliance risks.
What Non-Physicians, Nurse Practitioners, and Registered Nurses Should Know About Med Spa Ownership Under CPOM
Navigating CPOM requires more than a legal agreement; it requires a bulletproof financial structure. We help NPs, RNs, and entrepreneurs build MSO-compliant accounting systems that clearly separate clinical revenue from management fees. Protect your license and your profits with bookkeeping designed for the business of medicine.
It depends on your state, and how your business is structured.
In states with strict CPOM enforcement, non-physicians generally cannot own the entity that provides medical services. However, many non-physician entrepreneurs successfully own and operate med spas by using compliant business structures, most commonly a Management Services Organization (MSO) model.
CPOM vs. non-CPOM States:
Is It Legal for a Non-Physician to Own a Med Spa?
Published on January 22nd, 2026 | Written by Marc Pamatian
How the MSO Model Works for Med Spas Under CPOM?
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