Welcome to Beauty and the Biz!
Get a fresh legal perspective on running your practice from someone who knows the aesthetic industry while holding a juris doctorate.
Alex Thiersch, JD is not only an attorney and member of the American Bar Association, Illinois State Bar and the Chicago Bar Association, but also founder and director of the American Med Spa Association.
He began his career as an employment lawyer and started his own firm in 2007.
Through many twists and turns, Alex eventually went from a successful law career to being the founder & director of the American Med Spa Association (AMSpa), which is the only organization that provides legal, compliance and business resources to medical spas and cosmetic practices.
Alex ended up on my radar because we often shared the podium at medical conferences and he was always educational and entertaining to listen to.
I invited Alex to be a guest on Beauty and the Biz since we normally talk about the business and marketing side of plastic surgery but not the legal side.
Actually, marketers and lawyers don’t typically get along since marketers have lots of creative ideas to attract patients and lawyers have lots of reasons to say no to those ideas so there you go.
Some of the important topics you’ll hear Alex discuss are:
Common legal questions you get from surgeons
Insights about group purchasing organizations
How to legally handle unhappy patients
Social Media/photo/video consents
Common mistakes made that could have been avoided?
Commissions for staff
Craziest legal situation you have ever seen in practice or spa?
…and much more!
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Transcript:
Catherine Maley, MBA:
Hello, and welcome to Beauty and the Biz where we talk about the business and marketing side of plastic surgery. I’m your host, Catherine Maley, author of Your Aesthetic Practice: What Your Patients Are Saying, as well as a consultant to plastic surgeons to get them more patients and more profits. Now I have a really interesting guest today normally I interview surgeons, but instead, we’re going the legal route. I have Alex Thiersch. JD, he’s an attorney and member of the American Bar Association, the Illinois State Bar as well as the Chicago Bar Association. Now he began his career in employment lawyer law, and he started his firm in 2007. Through many twists and turns, somehow, Alex eventually went from a successful law career to being the founder and director of the American Med Spa Association, otherwise known as M Spa. It happens to be the only organization that provides legal compliance and business resources to medical spas and cosmetic practices.
Alex ended up on my radar because when the world was normal, and we used to travel a lot, we shared the podium quite a bit at the Medical conferences, and he’s a real pleasure to listen to, for a lawyer. He’s really funny, not that lawyers are funny, but the ones that I know are typically pretty dry. He’s entertaining. He was fun to listen to. I invited Alex to be a guest on Beauty and the Biz because we always talk about the business and the marketing side of plastic surgery, but never the legal side. And there’s a reason for that. I’m a marketer, I am on this planet to help plastic surgeons get more patients and a lot of what lawyers tend to poopoo all of my marketing ideas because they always find a hole in there somewhere. That pisses me off. Usually, I don’t deal with this side but it’s important, part of your growing up the practice. Alex, I welcome you to Beauty and the Biz. And I want to ask you how the weather is because I don’t know if you know this, but I’m originally from Chicago. And I know Chicago in February can be tough. And that’s why I live in California now. So how’s it going?
Alex Thiersch, JD:
Everything’s going great. Thank you so much for having me now. Now the pressure is on for me to say something funny.
Catherine Maley, MBA:
I know.
Alex Thiersch, JD:
The weather is fine, we’re sitting under about two feet of snow, it’s finally warming up. So it’s all going to start to melt and that’ll be bad, dogs get all dirty, It’s great. Things are great. Thank you so much for having me on. I appreciate.
Catherine Maley, MBA:
It was a pretty big jump to go from a typical law firm, corporate law, to building your very own medical association, you know, a Med Spa Association. That’s a really big deal. How did that jump happen?
Alex Thiersch, JD:
Yeah, I wish I could say I had this huge grand scheme, I thought the whole thing from start to finish. But like many things, that’s not what happened. I am an entrepreneur at heart. I knew I always wanted to have my own business and be my boss. And so I was at my law firm. Originally, I started it, the American Medical Association, to market my law practice, and I started summarizing some of the issues I found, I have represented the clients got it introduced to the industry. And I saw there were a lot of gray areas and a lot of people doing things they shouldn’t be doing. There was a lot of kind of no man’s land as far as what people could do and couldn’t do. I started to summarize those laws and said here’s a resource for people, I happen to hit on something that was needed at the exact right time, and it started to grow. Then I said, hey, maybe there’s something here and I dove into it, jumped in with two feet. Three years ago, I’ve kind of quit practicing entirely, I still have my license, and I still consult but I’m part of a law firm that helps with that. And it’s been a crazy journey, not where I thought I would be, that’s for sure. isn’t going to be talking about Botox and breast implants for my career.
Catherine Maley, MBA:
It is true, though. That’s the same way. Everyone says, How did you get into this and I say, by accident, I happen to love Botox and filler. I happen to go to some of the most famous dermatologists on the planet and they were terrible marketers, terrible customer service, their staff didn’t have a clue of a patient with a credit card versus an insurance card. I thought, oh my God, there’s such a need here for how to educate somebody on the emotional side of medicine. I call it the fun side of medicine, that, it’s a whole different world than the one they were used to on the medical side. So same thing, you see something in the industry or the world and you say “Hmm, I think I could help there”.
Alex Thiersch, JD:
It’s such a good point because there are two things there, one is, doctors tend to be bad business. Because they’re so focused on the medicine part and they don’t oftentimes understand and realize. I think is important for business people to always have their eyes open half the time, the opportunity will come. We’ll be sitting right in front of you and most people won’t even notice it. And kudos to you for doing that, because, the fun part is building the business, and doing the marketing. It also can be the scary part but it’s fun.
Catherine Maley, MBA:
And especially like, it used to be a lot more fun when everybody wasn’t a consultant like me, now, everybody’s a consultant, and it got competitive. And I loved it, when, like, during the first recession, I went through that was great, because when doctors are fat, happy, they don’t need me. But when things go awry, or sideways, then all of a sudden, I’m very valuable. And I like that a lot. But right now, things are really good for everybody. It’s kind of quiet around here.
Alex Thiersch, JD:
I have to say you’ve been at it for some time and I remember the first time I saw you, it probably was maybe VCs or a SAS or one of those or back in like 2009 or 2010. That’s a long time, you’ve seen it. And that gives you a unique and positive perspective on what’s going on. Kudos to you.
Catherine Maley, MBA:
Thanks, that is my differentiator. I’ve been around for 21 years, I’ve been hanging around with plastic surgeons through the recessions, the good times and bad. It’s the marriage I never had. Yeah. Tell me some of them because I don’t know much about the law part of this industry. What are some of the common legal issues that come up, especially for plastic surgeons? Or maybe for plastic surgeons who also have a Med Spa?
Alex Thiersch, JD:
It comes in more with Med Spas than with straight plastic surgery because the Med Spa industry has grown so fast, and you can open up a non-surgical aesthetic Medical Center and that’s where a lot of the stickiness comes in. A lot of plastic surgeons have medical spas and contract with medical spas as medical directors, and for plastic surgeons, this is true when it comes to social media and marketing. This is where things have changed so quickly and they’ve grown so fast, that the social media marketing aspect of whether it’s getting consent from your patients, getting an agreement with your providers, or making sure you are clarifying how much of the posts they’re doing on their personal Instagrams belong to you. There’s a whole lot of stickiness with that, we’re seeing influencers which are becoming a huge thing.
What does the contract say if you have a contract, as I mentioned, advertising, that’s the thing in plastic surgery, if you’re going to contract with a partner, you have young surgeons coming on, you’ve got succession planning if someone’s getting older and wanting to retire. With the Med Spas, there’s a lot of issues that get sticky. That’s where I focus on and things like ownership and the medical director contracts are also supervision, like who has to be present at the Med Spa, when services are going on? What types of providers are performing the services and what supervision requirements arise there and it gets sticky and that’s where most people if they are going to get in trouble that’s where it happens with the Med Spas and supervision.
Catherine Maley, MBA:
I have seen every scenario out there, the medical director who’s never there, the medical director who pops in periodically, the one who rents an office or space and visits to do injectable. I will say the ones I have noticed work the best are the ones who run more like a business. The surgeon doesn’t need to be there but he’s got his hand on the numbers. He knows what’s going on. Good management there and also excellent staff like killer nurses who know what they’re doing. They built that practice, they have great relationships, and the doctor is the overseer and lets the nurses develop those relationships. I will honestly tell you as a plastic surgery patient, lifetime patient nobody gets all my disposable income, everyone gets some of it. When I want surgery, I go to a certain place, when I want a specific body part I go to a very specific specialist.
But when I want my regular stuff, because I used to be super busy and traveling everywhere, and I didn’t have time for downtime, and I needed to get in and out, I needed to trust my result was going to be good. When you find a good spot in your neighborhood where they’ll take you on Saturday, they’ll take you at night. They’re pleasant, when the meeting is at 12, it’s a 12 not 12:20. There’s a lot to be said and I’m getting as good of a result with them probably better because they inject all day, whereas a plastic surgeon probably might not. I’m just saying there’s a reason they became popular. I know a lot of surgeons were angry about it thinking how dare they but I think you opened it up for the world because you didn’t want to work with these patients, you thought they were more of a bother to you but somebody saw that in the marketplace. That’s what the patient wants, I give them some of my money and it spreads around.
Alex Thiersch, JD:
That’s a great point. The plastic surgeons were the ones who launched this because they were delegating to RNs to do the injectables. And then you had this kind of generation of injectors who are non-physicians and had non-core positions, so non-surgeons coming into the marketplace as well. But what you said was important, whenever I talked to whether it’s one of our boot camps that we’re doing, or I’m just consulting with someone that’s, if you’re a surgeon, you can’t run your Med Spa, like your surgical practice, if you run it in the same way, you’re going to fail, because it’s a very different business model. There are the things you mentioned, like being on time, managing a high amount of patient inflow, and being able to time it the right way.
Because you don’t have surgery, you’re having people come in and out of all those things, it becomes such a different business. And I have seen the physicians who can kind of step aside and let someone with business skills, pick up the ball and run the business part. Those are the most successful ones because you’ve got much lower margins, the cost of services you’re providing is lower than surgery so you’re not accepting insurance most of the time. You’re operating as a retail center for most people, but in some ways it’s true. People are coming in, they’re buying services from you, and they’re leaving and you’ve got to have your act together, to be on point with all of your numbers, and with everything. Otherwise, you’re going to get up over your skis and you’re going to spend and not make enough money to survive which we see all the time.
Catherine Maley, MBA:
Do you have any advice for doctors who are approached by nurses or projectors and they say, oh, I’ve got a great deal for you? You’d be my director, and it goes all haywire. It’s like the agreements are real murky, like, who’s going to do, what are we doing? And do you find any like? I’m sure surgeons ask you this all the time, what’s a good scenario for them to partner with nurses, and when is it?
Alex Thiersch, JD:
It’s tough and you mentioned non-core physicians kind of, that’s true, because sometimes they’ll come in and have the same question here. The problem you’re going to run into deals, one is with ownership. Every state has various ownership laws as far as who can own the medical practice and some states don’t even allow nurses to own it. You’ve got to be careful with how they’re set up. Most of the time, they have no idea if they’re going in correctly or incorrectly. That’s you a lesser thing but the bigger issue it comes with, you want to make sure you’re partnering with someone you’re comfortable with that has a head on their shoulders, is experienced, has enough training, and you as the doctor are responsible for ensuring the person is trained.
One of the things that gets a little murky as the Med Spa industry has grown up is you’ll have an RN come and say hey, I’ve got this huge clientele I want you to do, you don’t have to do anything. I’ll give you a check every month and you collect and you can make your car payment or whatever. That’s dangerous because those patients are don’t belong to the RN, they belong to the doctor, he is the one who establishes the physician-patient relationship. The doctor is the one who has to diagnose, create the treatment plan, do the prescriptions, things like that. You can’t be an absentee landlord, you have to be involved. This goes from ensuring the people who are providing the services are qualified, it’s the most important thing because if you have someone who’s not qualified, and they injure somebody with an injection, I promise you the argument, I didn’t know they were not qualified is not going to work before the medical board, they expect you as the physician to understand what is going on at your facility.
And even if it’s a medical director contract, if it’s a nurse you’re working with, those patients are yours. You’ve got to be cautious of who you partner with. The other big thing a lot of folks get in trouble, the enforcement is limited in this industry. But we do see folks, I just talked with someone today he was getting investigated. The is what we call the good-faith exam, which they call in California. But an RN is not a nurse practitioner or PA but RNs are there to perform treatments at the delegation of a doctor. One of the things we see is the most troubling to us is when new patients come in, they see an RN, that Rn treats the patient, the patient leaves, and the doctor or PA or NP has never seen the patient, they’ve had no interaction with the patient whatsoever.
You’ve got the RN practicing medicine because you’ve skipped the step of creating the physician-patient relationship, creating the diagnosis and treatment plan which has to come from the physician. And if you get caught, that’s where the real problem comes in. I always tell doctors to proceed with caution. If someone’s coming in and telling you it’s too good to be true, you’re going to get a check. It’s not worth it, you got to do your homework, do your due diligence, make sure the I’s are dotted and the T’s are crossed.
Catherine Maley, MBA:
I would throw in if you’re going to work with somebody like the nurse, although here in San Francisco or California, I believe you have to be an NP but you better make sure you know where they’re at in their marketing. Like do they know how to attract patients to the Spa? Because they don’t just come by accident. I’ve seen too many doctors who have wasted days, spend a day there, and they have nobody or one or two and patients do Botox on what a waste of their time and resources. That’s a big component. How are you going to grow this thing? Or have you already grown it? That’s the only group I would hang around with the one who has a huge database, great reputation, great credibility, popularity in social media used to do a lot of events. That’s how I would partner with.
Alex Thiersch, JD:
Yeah, I agree. The thing you have to be careful or cautious on in that situation is, what happens when there’s a disagreement? Or if you say, I don’t like the way that particular marketing piece went out, because legally, whatever it is, like what we’re seeing now is a lot of these relationships, the surgeons and the RNs are mature enough where the RNs are moving on, or the surgeons are moving on because they’re so you separate, it becomes sticky, because we’ve seen, RNs leave a surgical practice and go over their own spot and take 25% of the injectable patients or more with them, and that can hurt, especially if they go right across the street, that’s another area where you’ve got to just be careful with who you partner with. Make sure your documentation is buttoned up, make sure everyone’s expectations are laid out clearly at the beginning so you know who’s going to do what and how it’s going to work. Think about what’s going to happen if you break up. I always considered marriage, what’s going to happen when you get a divorce, who’s going to get what? How are you going to split that up? Because if you don’t think about that, in the beginning, when you’re happy that everyone’s getting along, it’s going to be difficult and you’re not getting along. Interestingly, most of the time I see problems when people are doing successfully as opposed to when they do poorly because money does crazy things to people.
Catherine Maley, MBA:
Yes, I’ve gotten a couple of calls where the internal nurse in there and the plastic surgeon’s Med Spa, he has a plastic surgery side and the Med Spa side. The nurse loves social media. She built up a huge following. He wasn’t watching and it turns out all of the brandings were hers and not the practice. First of all, that was a yellow flag, she was getting ready to fly anyway or not getting ready to. But once she saw she can pull it off on social, she thought, okay. But I’d be careful with that I would have it built into the agreement. When you work for me all branding is ours, our watermarks, our logos, and it’s all us, it’s all the surgeons.
Alex Thiersch, JD:
That’s essential and we have these contracts as well as if you leave we get right, it becomes our property and you can’t use it. Even if they have their own Instagram if they’re using before and after pictures, or if they’re talking about your brand, all belongs to you, not to them, I’ve seen that too, and it can get hairy fast. We’ve seen some caustic and bad arguments among surgeons and nurses with exact situation.
Catherine Maley, MBA:
So, let’s talk about the unhappy patient. Because God knows there are a few. And I’ve done a lot of talks on this. And nobody wants to talk about prevention. But you know, it would have been helpful, you know, had you looked at your patient experience to make sure that person was happy all the way through. we human beings have a lot of signals that we overtly show the one we’re not happy with, I know what you can tell for personally with me, you’ll know when I’m not happy. It’s written all over me. So I would try to nip that before it accelerates to anything bigger and worse. But when it comes to unhappy patients, do you have any pearls? of how to keep it on the down-low? Before it accelerates?
Alex Thiersch, JD:
Yeah and it’s one of the toughest things surgeons and attorneys deal with because a lot of the calls we get are because someone left me a bad review, and I want to go after them. This was crazy, and there’s not an easy answer to that question. The first thing I always say is, and this is damn near impossible all the time, but don’t treat the crazy patient. There are a lot of crazy patients and it’s easy to say that, but it’s important like you were saying to teach physicians in their intake staff, what are the red flags. So you can keep those folks out of your practice, because it’s difficult when they come in, once they’re in the door, and you’re treating, and after surgery, now you’ve got things like you have to follow certain ethical rules when you’re discharging them. It becomes difficult, that’s the first thing. The other thing is not legal mechanisms it’s experience.
The experience they get, like you mentioned this at the top of this question, check your patient experience, if you and your team are nice, and you do things like responding to phone calls and questions, you follow up as needed. If there’s any type of adverse reaction or a question and they call you and you respond in a timely fashion, and you’re nice, and you’re courteous and professional, nine times out of 10. It’s over 90% of the time lawsuits and problems are mitigated. If you are nice and forthcoming with the patient, you provide the information they want, it’s when you get defensive. And when or they’re unhappy with the way they were treated by the front desk, or whatever it was they start to kind of get after, those are just cautionary tales. It depends on what they’re threatening to do not what we say for patients who are unhappy in the morning. I’ve never been afraid to recommend giving a refund, the refund is needed.
Catherine Maley, MBA:
I agree to get this I would say get rid of this as soon as you can. Don’t go into the defense mode where you say, no I’m going to fight this they’re wrong. That’s two years of grief, sleepless nights, I just get rid of it.
Alex Thiersch, JD:
Give them a refund and have a refund agreement in the contract. You can say, you agree that this is a full, settlement of any disputes and you’re not going to talk bad. You can prevent them from disparaging you in agreement, which is huge because that’s part of what you’re good. This is a time to keep your ego to the side. Everybody’s going to get bad reviews, everybody’s going to have unhappy patients, it’s impossible to avoid. The sooner you can get through it, manage it, get beyond it and start getting the positive reviews to dilute it. The worst thing you can do and this is counterintuitive (I think for a lot of physicians, a lot of people in general) is to fight it because if it’s online and you’re fighting it, you’re just drawing attention to it, you’re making yourself look bad.
There’s always the potential that you’re going to violate HIPAA or patient privacy by getting into it online. My goal is always you want to mitigate, you want to de-escalate, you want to get to a point where you can go your separate way, give them a referral so they can go somewhere else. If they’ve left a bad review, ask them to take it down. And if they will, then you move on and start getting positive reviews to dilute it down. That’s my feeling.
Catherine Maley, MBA:
A couple of times, I’ve heard the surgeon say, they had happy patients, and they were using their photos out in the world and now they’re unhappy, they say, that’s it, take my photos off. But the problem is, it’s out in the universe. So it doesn’t come up often for you and if so how do you handle it?
Alex Thiersch, JD:
That’s not as much as maybe you’d think and that’s easily solvable by the language you put in your photo consents. What you need to do is put in there that you are consenting to me posting this on my website or my social media, once it is up there it’s out there, right. The patient always has the right to revoke consent and if they do, your responsibility is to take it down from your website. But you need to be clear in the consent, but that doesn’t mean it’s not already out there in the world, because it is. That’s tough, but they’re there, your obligation is, if they remove their consent, you take their before and after picture down. That’s all you need to do. You seem to be scrubbed and scrubbed the metadata to make sure their names don’t pop off when you search them. But besides, there’s nothing else you can do, and if you have that done in writing, and the original content, that helps.
Catherine Maley, MBA:
Okay, let’s switch gears and talk about purchasing groups, whether you call it group, purchasing organizations or something, those I’m watching pop up more, some of the surgeons start their own or some of the business people in our industry have started theirs. I’ve heard about it for years, but I never get a straight answer. Some of these guys have invested heavily in these partnerships, or whatever the heck they’re called and I know for a fact they didn’t get their money back, like not close. I haven’t heard any good stories yet about them. In your experience. What are these groups about? And is it a good thing?
Catherine Maley, MBA:
Well, it’s interesting, because I had a long conversation with an attorney about this the other day. After all, we have a lot of folks at AMS who bought our membership who are clamoring for us to form an organization because, like the costs of Botox from Allergan, they want to go to the Platinum level, and they don’t. Most healthcare, verticals, industry segments, have GPOs in some fashion, for whatever reason, it has been resisted in aesthetics. And I don’t know of any that have made it, what you see is exactly what you’ve described as these kinds of smaller GPOs are forming, which are not necessarily illegal, but you’ve got to be careful because there are all sorts of distribution laws and in pharmacy distribution laws you have to watch out for, I’ve not seen any that work, but it is possible. It depends on how you do it.
There’s one side that I’ve seen, where if you develop a large enough set of like pieces of your organization if you have 100 locations, you can buy for 100 locations, that’s perfectly allowed, and you’re going to get a better deal. The issue becomes if you don’t have 100 locations, but you work with others and together we have 100 locations that are in different states now we’re buying at bulk rates, and then I’m distributing to you that is potentially problematic, it’s interesting. Surgeons are very anxious to get the best deal and I always tell folks, that’s a cost of doing business, you’re going to have to pay the rates until you grow to a point where you can afford a group discount. It makes me nervous, I would be very cautious, you shouldn’t buy Botox or drugs from Canada or overseas. You’ve got to stick within the parameters that exist. I am looking into GPOs because I’m as curious about it as anybody and I want to see kind of how this would work and couldn’t work and it hasn’t yet that I’ve seen.
Catherine Maley, MBA:
You would take the association members you have group them and go to Allergan and say, here’s my buying group, give us a good price on Botox, but then I can already hear allergen with all of its legal ease. They’d say, Well, how do we know who you’re distributing it to? You call for all I know, you’re giving it to the aestheticians?
Alex Thiersch, JD:
There’s a right way to do it. There are very large GPOs that exist. And when that happens, you’ve got that figured out through contracts. So Allergan would then be distributing directly to the doctors that are part of your group and you’re not, I wouldn’t be taking possession of it. But you have to figure out, okay, who’s getting it, who’s using it, and if an aesthetician is using it and injecting somebody, and they’re part of my GPO and they injure somebody, am I now on the hook, potential liability? That’s where I get nervous with the physicians I’ve seen do it. They’re the ones who are kind of distributing it out. It’s not going from Allergan to their different spokes of the wheel, it’s going to them, at least theoretically, and then they’re distributing it. And I don’t know that I would want to know exactly who’s getting everything I’m distributing and what they’re using it for and make sure they’re compliant.
Catherine Maley, MBA:
Does he want to come in and join us?
Alex Thiersch, JD:
No, she’s upstairs as well.
Catherine Maley, MBA:
I am a huge dog lover and I don’t mind it at all. I can’t believe my dog hasn’t shown up yet. Can you give us the common mistakes made that could have been avoided? There have to be two or three of them you see over and over?
Alex Thiersch, JD:
Yeah, that’s a good question. See, what’s the one I think of the most because the one that’s kind of jumping to my mind is I’m always amazed at how many times surgeons will enter into partnerships or agreements, whether it’s with each other, whether it’s with associated positions, or oftentimes, it’s like new business ventures, the vendor will come in and say I’ve got this great product, I want you to do this, and you’re going to get a cut of it. And they never get anything in writing or legally documented. It ends up going south and it becomes a big mess because they’ve never taken the time to document.
For whatever reason, surgeons especially tend to have an aversion to lawyers and understand why that is but they also don’t use lawyers, they tend to say, even when they’re starting their practices, and they’re doing their compliance documents, their own, operating agreements, and company agreements, they’ll go to their buddy who’s a real estate attorney, because they can get a deal on it, or they’ll go to Legal Zoom, and they won’t want to spend the time to get it done. Is the thing that’s most maddening to us, because, nine times out of 10, we are fixing things that had been screwed up in the beginning and we have a rule called the 5 and 50 rule, it’s 5000, 50,000. But it’s $5 to do it right the first time 50 to fix it after you do it wrong.
And I’m telling you, it’s a coin flip when someone comes in the door, whether or not that’s going to be the issue then even if they had an attorney before, oftentimes, it’s an attorney who doesn’t know, the nuances of aesthetics. They don’t know some of the ins and outs of the different state laws relating to aesthetics. And it takes time to use a knowledgeable attorney on your business. If you’re a business person, and you’re venturing out into other areas and you’re making the money, you can make it substantial, you want to protect it, make sure everything is done in advance. That’s one thing that jumps out. There’s a lot of them, to be honest.
Catherine Maley, MBA:
Talking about the agreement in today’s world, because it is retail medicine, and it’s much more about patient attraction and conversion and profitability and scaling and it’s a business and in business we often encourage staff by using commissions or bonuses or whatever you want to call them. I know it’s a big deal here in the world, I grew up in Chicago, I was in sales and was doing door to door like forever. I’ve only been paid on commission my entire life, I never got paid unless I did something, I’m from that mentality in that world but in this world, it’s an illegal thing. When is it fee-splitting? When is it motivating staff to go the extra mile?
Alex Thiersch, JD:
It’s a tough area and counterintuitive and how to incentivize people because this isn’t like going to the doctor because your throat hurts, and you need an antibiotic to make that go away. This is you’re competing for the same dollar and these tactics, and I call them tactics, but marketing, sales, conversion, all those things you’re talking about have to be done if you’re going to be successful. In most states, you have to be splitting provisions of some on some level and what those are often geared towards is they don’t want you paying for pictures.
It’s a version of the anti-kickback laws where they don’t want me giving you $50 to refer your friends. Every time you refer a friend to me, I give you 50 bucks. That’s a classic definition of an anti-kickback and Teespring and that’s where it all comes from. Whenever you look at it that way you are incentivizing somebody to come for treatment, but you can incentivize your providers in the work they do. If they are part of the marketing effort, and the entire revenue of the injectables, department for lack of a better word goes up, everybody can be compensated as a result of it going up based upon the potential of the particular schedule, when it can’t be known as it can’t be drawn directly to the cost of service.
The problem we see, and everybody does this, and it’s mostly illegal, but everyone does it. We see some people get in trouble and most of the time not to be honest. How people usually do is they’ll say, okay, Susie, the RN is going to get 10% of all revenue that comes in from Botox she does, I can tell you, in most states, if you got caught, that is, because you are paying them. There are two things, one, you’re paying her to go out and get to get patients and you’re also splitting medical revenue and medical revenue has to go to the doctor. How you want to do it is you want to incentivize them based upon what they’re doing in their job. What I like to do is our bonus structures, if your practice or your department hits certain benchmarks, they get a predetermined set amount of money.
So it’s 10,000 or 20,000, whatever it is, now, anyone who’s looking knows that it’s smoke and mirrors for the most part, because it’s the same thing. You’re structuring it a little bit differently. You’re calling it bonuses and incentive-based pay as opposed to commission and you can reach the same thing without paying.
Catherine Maley, MBA:
Yeah, I don’t know what the answers is, I know, then if you can’t do, you need to find staff who just like to work and grow your practice for you, who don’t need incentives to do that. I find it more difficult to find those kind of people in today’s world and it’s an issue that needs to be figured out because too many of the surgeons say to me, Oh, I give them a holiday bonus and be done with it. And that’s not an incentive plan. That’s where you get the patient showing up on December 15, saying, What am I getting this year so I can go Christmas shopping. That defeats the whole purpose of any of that.
Alex Thiersch, JD:
Doing an incentive plan is not difficult you can do it and have it be kind of be compliant and legal because most of the medical boards investigating these things are not interested in that aspect. If you’ve got an incentive structure, and your employees are busting their butts and they’re helping bring in business and you’re giving them bonuses and they know what it is, that’s not an issue. It’s when you’re overtly doing things that are violating anti-kickback laws and you’re incentivizing patients to come in. You’re paying your nurses you know, 100 bucks for every patient they bring in the door, and as long as you’re doing it in a careful way you can make this so you can cover yourself and you’ll have no issues. You’re not going to get in trouble, you got to take a couple of steps and you can get it done.
Catherine Maley, MBA:
I have called a couple of boards and I never did get a straight answer but from what I understood, it was the tit for tat. I will do this when you do that, and it was that clear line too. This is how you’re going to get paid. You know, and you’re not supposed to entice somebody to have a medical procedure.
Alex Thiersch, JD:
Yeah, and there’s another side to it, there’s the side with your team that’s doing the actual work for you that you’re incentivizing. What we’ve also seen is compensating influencers are compensating like the yoga studio or the Pilates studio, where you’re giving them a $50 gift card every time they send someone to your office. That is also potentially a kickback because, again, you’re paying someone to give you a referral, which is kind of the classic definition of what a kickback is. With influencers, which is kind of a new frontier, for all this, we see people say, Hey, I’ll give you 10 bucks or 50 bucks or 100 bucks every time you send me a patient. That’s fine in your business, it’s fine and events business that I do, but if you’re a doctor, that’s oftentimes not okay. It’s like we’re getting into these areas that most of the healthcare don’t deal with us either, because there’s not a lot of sales in like orthopedics right from the treatment side, their sales from the manufacturer side, but you’re not getting your nurse to sell somebody to come to you to get their knee replaced, right? It’s kind of you to go where the insurance covers you and you
Catherine Maley, MBA:
Can a plastic surgeon give away a free breast dog to an influencer?
Alex Thiersch, JD:
I don’t know the answer. I think it depends on the state you’re in and you’ve got to have it carefully documented, because I know for a fact, there will be medical boards that would raise their eyebrows at that and say, we had one, we had one matter where a doctor was giving away free Botox with breast dogs. They would do breast dogs…
Catherine Makey, MBA:
Yeah.
Alex Thiersch, JD:
…and as inducements. The medical board says they would give away complimentary Botox after the fact. So instead of saying we’re going to do a package, boobs, and Botox, that’s all you got to do, then you get both. They were saying, Come and get a breast dog and you get free Botox in the medical board, I think, Texas but I’m not 100% sure said is a kickback because you are inducing somebody with something of value to become a patient. Influencers giving them a complimentary breast, you can give away treatments, and you can set your prices. There’s the one side of the thing where you can provide an influencer, a service because you want to. But are they then going to go out and give you positive reviews? Because you can’t buy positive reviews, either they’ve got to be honest otherwise, it becomes a kickback…
Catherine Maley, MBA:
Right?
Alex Thiersch, JD:
…It gets tricky and it’s not that you can’t do it. You can always say like in those situations, come up with an even value, like what is the breast dog cost? She’s going to put up here, she’s going to provide you those types of services equal to the value. And if you make it a value-based contract, where you’re getting services in exchange for a service, that’s perfectly legal, you can do that all day. But oftentimes, what’s going to happen, it’s going to be an influencer comes in, there’s no agreement at all. They have it give, restaurant, and they’re going to go out and send people to them. And then when the medical board finds out, they’re going to nickel, how is this arrangement? And it’s going to be messy. That’s where you leave yourself open, you could probably get out of it but what if you can’t, because there’s no documentation, the medical board and lawyers have a saying if it’s not writing in writing, it didn’t happen. If it’s not in writing didn’t happen. If you’re going to be doing these things, you’ve got to get it in writing so that you can back it up on the medical board or a lawsuit comes.
Catherine Maley, MBA:
Because some of the surgeons think as long as I don’t have it in writing, it cant get ugly, because I didn’t write anything down. Like I didn’t say anything.
Alex Thiersch, JD:
That’s a worse way because just imagine what I mean, especially in today’s day and age with, all the politics and things said if someone says something out in the world, and they go and report it in the minute medical boards are not very well organized, and they’re oftentimes not very efficient. Anybody can file a complaint about anything and it can be anonymous. Most medical boards will allow you like in the state of California, anybody can call and say, this doctor did so and so. And I’m anonymous and just like hang up, and then the medical board is going to have to investigate because they’re going to have this information. And they have to do something. And, most of the time, that’s what happens. It’s an anonymous complaint. So if it’s not in writing, and you don’t have the parameters worked out, how are you going to prove your case? That this was a fair value exchange for this influencer, that they signed all the consents, that whatever it is, I agree. That’s a kind of goes back to my surgeons don’t like lawyers, and we need to kind of bridge gap and get them to use each other.
Catherine Maley, MBA:
But you know, as a consumer, I can go to the medical board and see if they have any actions against them, does it? Would they also show me something that said, Well, we did get three calls that were anonymous, do they show that?
Alex Thiersch, JD:
No.
Catherine Maley, MBA:
…because that I don’t want one with the consumers to know that because some of the consumers are that daddy.
Alex Thiersch, JD:
That goes back to Yelp and all these sites because that’s what the consumers can get it. Normally, nothing is going to be on your record on the medical board site, unless there’s a formal action gets to you as to be a complaint filed by the medical board against your license. And even then, if it’s just a complaint, it might not come up, it’s going to ask you some adjudication, a guilty finding, or a settlement. Most of the time to come complaints not going to. The problem with the complaints, though is, you will know where they came from. They’ll say, back in July of 2018, patient X went to your Med Spa and said XYZ and you’re like, How am I supposed to figure out what’s happening? Because there’s no information.
And what we’re seeing more and more of particularly in California, disfigured California viewers, but we’re seeing this more and more is that we’re getting these complaints and they are starting medical boards, starting to do more and more of the undercover investigations, where they send somebody in. Typically, they’re sending somebody in to try to get an RN to do something beyond their scope, whether it’s doing an injection without a good faith exam, write a prescription, there’s something’s wrong and then they go after and they get everybody. We’re seeing that that’s kind of a trend that is going to continue to go up and that’s scary because you don’t know who’s coming in. That’s why it’s always good to have everything buttoned up from the beginning. Because if somebody does come in, you’re doing it right.
Catherine Maley, MBA:
For sure. Last question, what is the craziest legal situation you have seen? Since you’ve been hanging around with the surgeons?
Alex Thiersch, JD:
Oh, boy. I would have given up more sarcasm because I forgot. I would have to say that it’s…
Catherine Maley, MBA:
How about the doctors dating the staff?
Alex Thiersch, JD:
Well, we see that I was going to say something similar but that’s a big issue.
Catherine Maley, MBA:
Yeah. I’ve seen that myself quite a bit, I think. Are you out of your mind? That is a rice paper issue.
Alex Thiersch, JD:
The craziest thing that I think about it involves exes. So whenever you date your staff, one, there’s sexual harassment laws that come into place and discrimination laws that are immediately invoked whenever you’re dating somebody who works for you because there’s a power dynamic that can be raised. I would strongly suggest you don’t do it. However, most of the time, when we see vicious complaints coming against a surgeon or a Med Spa owner or a physician, it’s from someone they have dated in the past. And we had one where the medical board continued to get complaints against this particular Med Spa, for things like unsanitary conditions, garbage being left all over the place, rats, in the facility, and it turned out it was from this person’s ex-husband, who was pissed off. Get it cleared up, we handled said look, this is fake, they go to a different location, a different state and what happens lo and behold, within months, another complaint starts happening and it happens over and over again. You’ve got to be careful with that. Don’t date anybod,y whon’t get married, be a hermit, a nun, a priest, whatever it is, because you’re but if you are going to do this try to make it outside of your workforce and certainly not.
Catherine Maley, MBA:
Can you write up an agreement? Like, write it up while you’re still in love, such as, here’s what’s going to happen if we stay together. Here’s what’s going to happen if we break up.
Alex Thiersch, JD:
I guess it would be. It’s tough because the issue is not when your love is when you’re not when the problem happens, because then the person who’s fighting, number one, is Spybot. Oftentimes, they’re angry, those types of feelings come in. There’s nothing worse than being, it happens, right? I met my wife at work years ago, it happens. You’re around people, you’ve got to be careful.
Catherine Maley, MBA:
Take Well, yeah.
Alex Thiersch, JD:
Well, get it in writing.
Catherine Maley, MBA:
Thank you so much, Alex, for being on Beauty and the Biz. I appreciate it and if somebody wants to get a hold of you to ask you their personal questions, how would they do that?
Alex Thiersch, JD:
Yeah, I mean, shoot me an email, americanmedspa.org is our website, I’m easy to find, just type into Google, I’ll come up and we’re here to help. That’s what our whole organization is here to do is to provide as much information as we can to the public. If you need additional information, we’ve got it. We’ve got all sorts of forms and resources. We’ve got a full law firm that backs up. We’ve got all the tools. I appreciate you having me and congrats on your success in the industry that is going well. Nobody should be afraid of lawyers.
Catherine Maley, MBA:
I hope to share the podium with you again, someday, if we ever get back out there. So we will. All right.
Alex Thiersch, JD:
Until the next 18 months.
Catherine Maley, MBA:
I sure hope so. I’m ready to get back out there again. Okay, and we appreciate your no problem. That wraps it up for this episode of Beauty and the Biz. If you would be so kind as to subscribe to Beauty and the Biz. I’d appreciate it as well as leave us a nice review. That would be terrific. If you’ve got any questions or feedback, leave them at www.CatherineMaley.com. And of course, if you want to talk to me on Instagram, I’m at CatherineMaleyMBA. Thanks much and we’ll talk again soon.
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