A Common MedSpa practice puts medical directors’ licenses at risk.

The regulatory landscape surrounding MedSpas is a minefield, one that providers who agree to become medical director are often unaware they are entering. There are many issues that providers need to be aware of to avoid incurring substantial financial and licensure liability. This article will focus on a seemingly innocuous practice that is widespread in MedSpas, and it puts providers at significant risk of losing their license to practice medicine; namely, the indiscriminate use of topical compounded analgesics.

Physicians often associate becoming a medical director of a MedSpa with a measure of prestige along with a way to increase their income without taking too much time away from their own practice. However, physicians coming from other specialties, or a practice environment where they are directly involved in caring for patients, will often be unaware of the particular risks associated with being a MedSpa medical director.

Cautionary tale

In November of 2004, a physician in North Carolina agreed to serve as a MedSpa’s medical director starting January 2005. To his credit, the physician had given

himself six weeks to do his due diligence. He planned to assess all the MedSpa’s protocols to be sure that they were in compliance with all regulations and adhered to best practices. This is an important step many incoming medical directors fail to engage in before assuming responsibility. The departing medical director left abruptly, and the physician was pressed into service six weeks early before being able to complete his review of the MedSpa’s practices. Despite the physician’s persistent attempts to contact the outgoing medical director to go over existing practices at the MedSpa, he was unable to reach him.

One of the practices at this MedSpa had been the use of a compounded topical analgesic that was given to patients. As is often the case in the MedSpa industry, and even in many cosmetic practices, the compounded topical analgesic (usually a combination of Benzocaine, Lidocaine, and Tetracaine in varying strengths) is ordered in bulk from a compounding pharmacy. The medical director will write a prescription for a generic patient, and the topical analgesic will be used ubiquitously on any patient that requires it. In this case, the hapless new medical director, following this MedSpa’s existing practice at the time, sent a compounding pharmacy an emailed order for more of the topical analgesic the MedSpa had been

using. By December the new medical director realized that this practice was problematic and ended it.

Despite the physician’s efforts to bring the MedSpa into compliance, the NC Medical Board was unequivocal in its opinion of the practice. Even though it was just six weeks that he had been the medical director, he had allowed the existing practices concerning compounded topical analgesics to continue; that was enough for the NC Medical Board to suspended his medical license indefinitely, staying the suspension after six months. He was barred from serving as medical director, and the Board communicated the adverse action to all the national physician data banks. The former medical director was also reprimanded and also agreed not to serve as a medical director in the future.

Relevant Laws

The practice of medicine allows for compounding of medications, and even something as simple as diluting, crushing, or combining a medication amounts to compounding and requires a prescription. While the U.S. Food and Drug 1

Administration (FDA) regulates compounding, licensed physicians are exempted from these FDA regulations if they follow certain requirements. They are:

1. The compounding must be done for an individually identified patient; 2. The prescription should indicate that the compound is medically necessary.

If a physician fails to comply with these, and other FDA requirements that deal 2

with the compounding standards and what substances may be compounded, a physician will lose the exempted status and be subjected to the stricter FDA standards that are applied to drug manufacturers and subject to penalty. This can include a warning letter, seizure of any compounded product, an injunction to stop a physician from further compounding, or criminal prosecution.

In addition, state medical boards will want to see evidence of an established physician-patient relationship which will include items like:

1. The patient’s chart that documents a need for a compounded drug; 2. Informed consent to include awareness that the patient is receiving a

compounded drug and has been made aware of any risks associated with it.

21 U.S. Code § 353b(d)(1)1

FDA 503A Exemption Requirements for Physicians (amended)2

Some states will also have dispensing laws that regulate whether the drug can be sent home with the patient (depending on the state, the physician’s practice or MedSpa may require a dispensing permit if the patient is being charged for the drug) or if it needs to be administered in the physician’s office.

Malpractice liability

Adverse reactions to topical analgesics used incorrectly and without education have resulted in patient deaths. In at least two instances, young college students in their early 20’s were sent home with compounded topical analgesics in anticipation of an upcoming large area laser hair removal treatment. They applied it over large areas of their body and then wore clothing over it while driving to the MedSpas for their treatment. Application of the analgesic over a large area, and then covering it with clothes significantly increases the effect and absorption of the analgesic. Both suffered seizures and respiratory arrest due to drug toxicity.

In cases like these, and others where the injury suffered by the patient is not as serious, it is likely that there will be a determination that the claim of liability is not simply based on negligence, but negligence-per-se. Where regulations to prevent a specific injury are violated, if the injury is then suffered as a result of the violation, a claim for negligence-per-se is likely. A claim made under this doctrine of negligence will be substantially harder to defend and a finding of negligence will be likely simply because the regulation was violated.

Lessons learned

An offer to be a medical director of a MedSpa, while enticing, should only be accepted after performing substantial due diligence. Federal and state laws should be complied with, and no practice the MedSpa engages in should be incongruous with the practice of medicine and standard of care as defined by the relevant state medical board. If compounded topical analgesics are in use, scrutiny of that practice is warranted. Consequences for flaunting the regulations for the sake of convenience can be dire for both physician and patient.