GLP-1 Legal Updates, Non-Competes & Compliance - Interview w/ Courtney Walker

Summary

Podcast Summary: Med Spa Success Strategies – Episode on GLP-1 Legal Updates, Non-Competes & Compliance

Title: GLP-1 Legal Updates, Non-Competes & Compliance
Host: Ricky Shockley
Guest: Courtney Walker
Release Date: February 28, 2025

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Introduction

In this insightful episode of Med Spa Success Strategies, host Ricky Shockley welcomes Courtney Walker, a seasoned expert in regulatory compliance and strategic legal guidance for med spa and aesthetics practices. With a formidable background that includes advising governmental bodies and overseeing significant mergers and acquisitions, Courtney brings a wealth of knowledge to help med spa owners navigate complex legal landscapes.

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GLP-1 Legal Updates

Overview of Recent FDA Changes

At the onset ([00:02]), Ricky sets the stage by introducing the timely topic of GLP-1 medications, specifically semaglutide and tirzepatide. Courtney Walker delves into the latest FDA updates, revealing that both tirzepatide and semaglutide have been removed from the FDA’s shortage list as of October and recently, respectively ([01:03]). This removal imposes new restrictions on compounding pharmacies, limiting their ability to manufacture these medications until their patents expire.

Implications for Compounding Pharmacies and Med Spas

Courtney explains the dynamics of demand versus supply, noting that increased demand for these medications often leads to shortages, which in turn creates opportunities for compounding pharmacies to produce investigational formulations ([01:03]). However, with the recent FDA decisions, compounding pharmacies must adhere strictly to registered standards or cease production of these medications ([01:03]).

Operational Challenges and Compliance

Med spa owners face new operational challenges, such as proving the medical necessity for using compounded versions of GLP-1 drugs. Courtney emphasizes the importance of conducting medical evaluations and lab tests to justify the use of compounded medications over patented ones ([06:17]). She advises med spa practitioners to review their malpractice insurance policies to ensure coverage when prescribing GLP-1s ([06:26]).

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Non-Competes and FTC Rulings

FTC's Nationwide Ban on Non-Competes

Courtney addresses the Federal Trade Commission’s (FTC) recent ruling banning non-compete clauses nationwide, highlighting its constitutional challenges ([40:46]). The ruling asserts that non-competes are state law issues, necessitating a reasonableness standard based on duration, geographic scope, and specific industry limitations.

Impact on Med Spas

Most med spas utilize non-compete agreements to retain providers and protect business interests. Courtney explains that while non-competes are enforceable if reasonable, overly restrictive clauses (e.g., prohibiting practice in the same field indefinitely) are not permissible ([44:55]). Med spas must now reassess their employment contracts to align with state-specific regulations and ensure enforceability ([40:46]).

Restrictive Covenants Best Practices

Courtney advises med spa owners to implement restrictive covenants that are time-bound (e.g., one year), geographically limited (e.g., 50-mile radius), and specific to the practice area ([44:50]). Additionally, she underscores the importance of non-solicitation clauses to protect business interests post-employment.

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Compliance in Med Spas

Physician Oversight and Scope of Practice

A significant portion of the discussion ([19:44]–[25:13]) revolves around the necessity of proper physician oversight in med spa operations. Courtney warns against improper delegation and the importance of aligning tasks with the appropriate license holders. She cites recent crackdowns, such as in Texas and Illinois, where lack of compliant oversight led to severe legal repercussions for med spas ([23:20], [24:28]).

Internal Audits and Policies

To mitigate risks, Courtney recommends that med spa owners conduct thorough internal audits of their staff licenses, define clear scopes of practice, and establish robust policies and procedures. Regular consultations with medical directors and ensuring their active involvement in practice operations are crucial steps ([27:02]).

Contractual Pitfalls in Med Spas

Courtney highlights common contractual issues such as auto-renewal clauses, choice of law, and venue provisions which can pose significant risks if not properly negotiated ([32:54]). She advises med spa owners to scrutinize vendor contracts, avoid unfavorable terms, and ensure compliance with lease agreements concerning permitted use of premises.

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AI Applications in Compliance

Leveraging AI for Legal Efficiency

Courtney shares her innovative approach to integrating AI into compliance workflows. She discusses the development of AI bots, like "Lisa," which assist in reviewing contracts and identifying high-risk clauses by flagging pertinent sections and summarizing key points ([47:04]). This automation allows for more efficient legal management without incurring high attorney fees.

AI in Strategic Business Planning

Beyond compliance, Courtney utilizes AI for business strategy, such as revenue goal planning. Her AI-driven tools analyze service offerings and provide actionable insights to help med spa owners achieve financial targets ([51:32]). These applications demonstrate the potential of AI to enhance both legal compliance and business operations within the med spa industry.

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Action Items for Med Spa Owners

1. Review and Update Malpractice Insurance:

   • Ensure that prescribing GLP-1s is covered and consult with insurance brokers for clarity ([06:17]–[06:26]).

2. Revise Employment Contracts:

   • Implement reasonable non-compete and non-solicitation clauses tailored to state laws ([40:46]–[46:36]).

3. Enhance Physician Oversight:

   • Conduct regular audits of staff licenses and define clear scopes of practice ([19:44]–[25:07]).

4. Negotiate Vendor Contracts:

   • Avoid unfavorable terms such as auto-renewal clauses and restrictive venue provisions ([32:54]).

5. Implement AI Tools:

   • Utilize AI bots for contract review and business planning to streamline compliance and operational efficiency ([47:04]–[54:37]).

6. Document Medical Justifications:

   • Maintain thorough documentation to support the use of compounded medications ([10:50]–[11:02]).

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Conclusion

The episode provides a comprehensive analysis of the evolving legal landscape affecting med spas, particularly concerning GLP-1 medications and non-compete clauses. Courtney Walker offers actionable insights and practical solutions to help med spa owners navigate these complexities, emphasizing the importance of compliance, strategic planning, and leveraging technology. Her expertise equips listeners with the knowledge to safeguard their practices against legal pitfalls while fostering growth and operational excellence.

Notable Quotes:

• Courtney Walker ([01:03]): “The FDA removes the ability for a compounding pharmacy to create the medication until the patent expires.”

• Courtney Walker ([06:26]): “You have to make sure that everything that you're doing is covered by your malpractice.”

• Courtney Walker ([40:46]): “Non-competes have to have some level of reasonableness, like one year, 50 miles, patient practice.”

• Courtney Walker ([51:32]): “AI bots can really help fine-tune your revenue goals and offer strategic insights without replacing a CFO.”

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Connect with Courtney Walker:

• Instagram: @courtapprovedaesthetics
• Website: courtapprovedaesthetics.com

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This summary is intended for informational purposes and does not constitute legal advice. For personalized guidance, consult with a qualified attorney.

Transcript

[Ricky Shockley]

Hey there and welcome to MedSpa Success Strategies. I'm your host, Ricky Shockley, owner of MedSpa Magic Marketing. And this is where MedSpa Aesthetics practice owners come to discover strategies and tactics that help them better market and manage their practices so they can grow, improve profitability and have greater impact for their teams and their patients. Today on the podcast, we have a powerhouse in the world of innovation and strategy. With a background that includes working with the Tennessee Governor's Office and advising the TVA Board of Directors and guiding private mergers and acquisitions exceeding $23 million. Our guest brings a wealth of regulatory and strategic experience. Her secret to success, helping leaders like you make informed, high impact decisions. Welcome to the show, Courtney Walker. Courtney, we're so excited to have you. Thanks for coming on the show. We just talked about. We both had to reschedule from last week, but it seems like we're doing that maybe at the perfect time because there was some news that came out over the weekend. So I know we've got a lot we wanted to talk about today, but figured we might as well start on the GLP1 updates. So can you just share the latest news and what people should be aware of here with GLP1 semaglutide. Tirzepatide.

[Courtney Walker]

Yeah, of course. Thank you so much for having me. And you're right, it is great timing. I suspected that the news would come eventually, but it did come as a surprise to me that it came on Friday afternoon. So now, in addition to the FDA removing tirzepatide, which happened in October, from the shortage list. No, now the FDA has removed semaglutide from the shortage list. And so there are certain deadlines that compounding pharmacies now have to be aware of, depending on the type of compounding pharmacy it is when they no longer can manufacture it. I think it's important to kind of step back sometimes with people and give like a, you know, 30 second spiel of like, what does all this mean? So we had an increase of demand and, and very low supply, which this is not the first time this has happened for a medication. But that increase of demand and low supply creates an opportunity for compounding pharmacies to produce what is otherwise a patented medication that's protected for 20 years. And so those, the FDA then puts these drugs on a shortage list and says, if you are going to create this medication, you have to be a registered compounding pharmacy. You have to comply with these standards and you can create it so long as you comply with what it, what it takes to be a compounding pharmacy when that shortage list is changed. So when tirzepatide is removed, when semaglutide is removed, the FDA removes the ability for a compounding pharmacy to create the medication until the patent expires. So again, not the first time that we've seen this happen. It's happened with insulin before. It just is a hot button issue in the world of medical aesthetics. So the question that I've answered a lot this weekend is what do I think will happen? And if I could predict what would happen, I would not be working because I would go play the lottery and go buy a beach house somewhere. But what I suspect will happen is similar, something similar to what's happened with Girzepatide, which is people will get involved, attorneys will get involved, things will drag out, because every attorney loves to drag things out, and we will somehow things will. Will shake out in a way where medical spas are still allowed to offer some variation of this, because we still have this huge patient population that's been introduced to the medication, has seen benefits from the medication, and we are, while we want to be kind and all the things we try to be in our society, we are still a society of capitalism. And people aren't going to let just money walk out the door. The pharmacies are going to figure it out. So what I've seen so far is pharmacies who are producing what is not otherwise an identical copy of the medication, so they are compounding it with something like B12, and they are trying to figure out how they can continue to produce it in a way that's compliant with the fda. So there's two kind of concerns here. One is, if you're a compounding pharmacy, how can you continue to compound it in a way that is not subjecting, subjecting you to mass litigation? That's obviously not really a concern of what I would. I don't think that you have a lot of compounding pharmacy listeners, but not really concerned of the Med spa space. If you can get it from a reputable compounding pharmacy that that's licensed, then you are to assume that they're covering themselves and doing what they need to do. But from the Med spa space, the issue that you'll run into or that I think that people run into is one, can you show that the patient is in need of that new drug and the way that it's compounded? Meaning do they have a need for it to be compounded with B12 as opposed to something else? There still has to be this medical component that you have to prove as a provider that you're providing the best patient care and not the. If at the end of the day, if you say I'm choosing this version of the compounded medication over the patented medication because the compounded medication is the only one I have access to. Wrong answer. You have to show that this, that your patient needs this specific type of medication and the way that it's compounded. So they have a B12 deficiency, which could mean that you need to start running labs on people, which I would encourage you to run them anyway if you aren't already. But you just have to really prove your case and that this, you need this new. Your patients need this new medication compounded. And the other area that we've run into that I think we'll run into when semaglutide comes off is whether insurances malpractice will cover this from. You know, because there are all there we see all of these unknown pieces. And so from a risk liability perspective, is your malpractice covering you for prescribing GLP1s? Now there are a lot of operational concerns, but ultimately I think some version of these GLP1s will still be available. We just have to navigate it from an operational standpoint.

[Ricky Shockley]

So should everybody be checking their policy, their malpractice policy to make sure that they've got clarity on whatever they're doing with these GLP1 products?

[Courtney Walker]

Yes. I would encourage everyone right now to check and make sure that everything that you're doing is covered by your malpractice. You would be surprised how many times it's not, but that all the procedures that you offer are covered by your malpractice. And then it's always a good. You don't have to be an expert in malpractice insurance. What I found to be so helpful is so helpful and underutilized is the power of networking and finding an insurance broker that you have a good relationship with and that you can reach out and ask these questions too. So I have a great broker and a great firm insurance company that we work with and that was the first thing that I fired off on Friday. I know that you probably don't have answers to this, but I need updates if this changes and creating those relationships can keep you in the know and keep you safe and compliant and covered if something happens.

[Ricky Shockley]

So this might be a silly question. Probably don't know as much about this as I should. So when, when you're a med spa and you're offering these GLP1 products, I know you're not allowed to use the brand terms, right? Like Ozempic, for example. Unless you're actually offering Ozempic, if you're using a generic version of these products, are. Is there a legal implication to using the generic version of the name? So if you're calling it Semaglutide and it's now not on the shortage list, so these people that are producing a product that's basically similar to Semaglutide or has some sort of an added element, are there any legal complications with marketing it as Semaglutide or Tirzepatide still?

[Courtney Walker]

No. I mean, because that's still what it. That's still what it is. I think that we will see. I think that's part of the operational and the optics that are there. So there's like a legal component and then just an overall optics. From what has happened in the past, I think these big companies will have a huge marketing push of scaring patients away. Like they sent demand letters to practices. They've put a lot of advertisements out there about. If you've seen the world of compounding, pharmacies are not safe, just like this big marketing push to make sure that people are using the actual patented versions. So aside from, we all know you cannot use the brand names, but you can use the compounded version name, I think what will happen with practices is they will need to clarify that what they're compounded with, not necessarily out of necessity, but just trying to be proactive and avoid someone like Eli Lilly sending you a nasty demand letter. Which if you're doing a GLP1, if you're continuing to prescribe GLP1s, I would not be surprised if you did not receive a nasty gram from one of the providers.

[Ricky Shockley]

So as far as I'm aware, most of like the clients that we work with, the med spas, they're not using the name brand version of the products they're using the generic compounded for. Is that most people.

[Courtney Walker]

Yeah.

[Ricky Shockley]

Okay, so most people are using the generics. Now you've got this issue potentially where you can't just rubber stamp the exact generic. The compound pharmacies are going to have to come up with like alternative variations of the product that med spas will be purchasing. But then there's this legal onus now on the medical practices and the med spas to explain why they're using a modified version instead of buying the brand name. So now you've got a little bit extra obstacle to overcome if you're not actually just selling the name brand versions of the products.

[Courtney Walker]

Yes, that's, that's correct.

[Ricky Shockley]

It's very complicated.

[Courtney Walker]

Yeah. So potentially, because I think as a medical provider, you can say, well, everyone.

[Ricky Shockley]

Could use a little B12, but subject to courts, basically.

[Courtney Walker]

Yeah, but that's not a policy. Everyone could use a little bit of B12 in their life. Like that's not going to stand anywhere. So, you know, maybe having a policy in place where, what do you consider what is the norm for acceptable B12 levels and taking the patient, having them go to wherever LabCorp and get their blood drawn and their levels ran. And if a patient falls within that acceptable range, then they aren't a candidate for that, that new compounded version because they don't need the additive. They could benefit just from the normal patented medication. So I think as a practice you're going to have to create policies and procedures and potentially limit your patients. But that's for your ultimate safety, to show that you are servicing a patient population who does need this specific medication and proving that you've, you've done your, you know, your due diligence to show that they fit in that population.

[Ricky Shockley]

So, so there's going to have to be a medical reason.

[Courtney Walker]

Yes.

[Ricky Shockley]

That you'll have to be able to define as to why you're not using the name brand version of the product. And it's usually going to be a combination of the, the compound plus an additive.

[Courtney Walker]

Yes.

[Ricky Shockley]

It's not going to be like a modified version of the base compound necessarily.

[Courtney Walker]

No, it's always, it's going to be with an additive. And on that note, this is the practice of medicine, so this should not be new news to anyone. You should always have a medical reason that someone needs. Even if it's something for like cosmetic Botox, there is a medical reason that you have to document on why someone needs that. So for the practitioners listening to this, like, oh yeah, of course we have to put prove that they need that. We have to do the exam to show that they could benefit from this because we're not just giving, you know, medication to anybody who walks in the door.

[Ricky Shockley]

But now you've got this extra onus. You don't just need to prove that they need semaglutide or tirzepatide, you need to prove that they need that plus whatever the additive that you're using is. Could you compound that in a way that's like you're using different additives? So like this person's B12 deficient so my compound, I've got one version of the compound that's you know, product plus B12 or one product that's like plus vitamin D. Is it that simple? Potentially.

[Courtney Walker]

So it's, it, it would be that simple potentially for the compounding pharmacies. But at the method level we, unless you're a compounding pharmacy, you can't be compounding the semaglutide with the additive. So yeah, potentially you could have a relationship with multiple pharmacies or if a pharmacy is compounding with multiple things and have different, different options to base based on what the needs of the patients are. Yeah, absolutely.

[Ricky Shockley]

So, so I'm going to assume from this you're probably going to have two different types of reactions. You're going to have the very risk averse med spas that go, okay, I'm going to have this dialed in. I'm going to have a very clear definition of why I'm buying the product with the additive aside to this, I never really asked this question for med spas. Is there a reason they're not buying the name brand version of the products? Is it price?

[Courtney Walker]

So price is to buy. Yes, absolutely. Would be cost prohibitive. And also their patients from insurance basis do not qualify. So it, you know, the actual brain, brain medications are not that expensive. Your insurance covers it. But for me to go to my primary care and get the medication, there's. My insurance will not cover it. So I would have to pay that out of pocket cost and it's way too expensive.

[Ricky Shockley]

So everybody's looking for the, for the compounded variations because you're getting it at a lower cost. Now you've got this added. So my assumption is again, there's going to be probably two different types of reactions. The people that are like, okay, I'm going to figure this out, is going to limit my patient database because I want to make sure that I'm compliant. And then I think reality is not that this is correct, but I think there are going to be a lot of people that go, are they really going to crack down on this? Is this really going to be a thing? And there's probably a lot of people I'm assuming that are just going to roll the dice. Do you anticipate that's probably what ends up happening here? They just roll the dice and keep buying the compounded drugs and they don't necessarily have a good reason why they're using the variation other than that just the cheapest one that they can get access to.

[Courtney Walker]

Yeah, absolutely. I mean that's the world of medical aesthetics is no one thinks that they're going to crack down on them because they're a one person location in a very small city. But we are seeing that. We are seeing people go after, we're seeing the Department of Justice go after people in small locations, small cities, not small or very small, relatively speaking, profit margins on things. They're not, you know, they're not a big practice and you're, you know, just because they're small doesn't mean that they are fitting into the cracks of things where they don't get noticed.

[Ricky Shockley]

Is it interesting, that's a very interesting dynamic for like med spa owners because is it one of those things? I know you probably because legally the answer is. We know what the answer is from this conversation. But there is this part of you that I know is you feel like you're getting left behind if everybody else is going to buck the rule and the rule is not going to be enforced that you're doing. You're. You're trying to follow the rules to your own detriment. And I assume that's where a lot of this calculation comes in. Like, is there any like interim guidance for those people to have like a feel? Like, is this something that like is being worked out in the courts? Do I actually have to implement this change now? What is the actual risk that I'm assessing here in terms of like, is it 99.9% chance that this is not going to be enforced in the way that it is technically outlined on paper? And again, I know that as a lawyer you've got a line that you've got to draw in terms of how you advise that, but just kind of realistically how these things generally play out. Any, any thoughts on that?

[Courtney Walker]

Yeah, I think this conversation. So I've heard this from many, many clients of I'm tired of being the only one who's doing things right. And there is some level of you have to do kind of a risk assessment that is something that I try to help clients do is to be, you know, what is the actual ramifications if something bad happens from a compliance standpoint, not from a patient standpoint, but if someone comes through your do, is this like a slap on the wrist or are you going to jail? Like, where are we at on that spectrum? So they can make. Clients can make their own informed decisions over what legal business decisions they want. Because what we're ultimately talking about is the intersection of legal compliance and business operations. Like, we still have to run a profitable business, but at what? And a compliant business. But we can't be totally risk adverse if we're totally risk averse. We would never go into entrepreneurship because entrepreneurship is very risky. So what I will say to people who are listening, this is compliance in this area, in my opinion, is not as scary and daunting as perhaps it seems. I think that when we're talking about like an additive of B12, I can't tell you because I'm not a practitioner first. But not that everyone would benefit from B12 using some B12. But you know, I take a B12 shot every other week and there are many documented reasons that it is helpful to patients. So I say just having the paperwork in place and following that paperwork. So not just saying we only give it to people who their B12 range is within this and this. But then you never draw labs. First of all, you should be drawing labs anyway before you give someone a medication like this. But if you aren't drawing labs, maybe that's where you start. Labs are not that expensive to draw and to send a patient to. Like I mentioned Labcorp. Like I think it's like $15, so not that expensive. Then you have the data and then you compare it to your policy and then you have, you have done your due diligence to prove that they are a good patient for this type of medication. So that's not as daunting or it's going to leave you in the dust. Like, if anything it just shows that you are a compliant practice and you should use that to your advantage. When you're talking about why go with your practice versus someone else's. Like, because we are drawing the levels, because we are making sure that you're the best candidate. And if what you asked if you have two different versions of semaglutide with a B12 and I think you said vitamin D, that you can show that there's actually some medical judgment in what is best for the patient and you're not just sticking someone with anything.

[Ricky Shockley]

Yeah, that reminds me very much of like how we operate with like the HIPAA related things. It's like sometimes there is a gray area to some of it and it is up for interpretation. But having documentation and having a reason and being able to explain it, if anybody does ever come knocking, it's going to give you a lot more peace of mind.

[Courtney Walker]

Yes, absolutely. And having a document, having the documentation and following it because just having it in place is. Yeah, if you're, you know, like I said, if you have your B12 levels, have to be between this and this. But you never have someone draw labs. You might as well rip that paper up because it means nothing.

[Ricky Shockley]

Yep, makes sense. Yeah, you're not following your own policy at all. In that case. Hey there. Wanted to briefly interrupt the episode to make a quick ask. If you're a podcast listener, it would mean the world to us if you leave a review for the podcast, whether that's on itunes or Spotify. It's something I hadn't really remembered or thought of asking for, but it does help us show up more frequently so that we can reach more people with the information that we're providing. So it mean the world to us if you'd leave a review on itunes or Spotify. If you're listening on audio. If you're watching on YouTube, make sure to hit the subscribe button so you're in the loop for future videos and you don't miss any of the content that we're putting out. So in, in the world of legal, just as we look here in the, you know, the first quarter of 2025, other than this, are there other things that are kind of on your radar from like a compliance perspective? Place certain things where you see there's more of a crackdown happening or an area of concern that you see people haven't addressed. Are there anything, any things that fall into that bucket?

[Courtney Walker]

Yeah, I think if we go back, you know, down memory lane for just a second on medical aesthetics, when it first started, when first became this big, you know, the discussion where I joked, where I joke with people that Botox used to be something that the women would talk about in the country club bathroom, and it wasn't talked about openly. And then the world of the Kardashians and celebrities and being transparent changed everything. And now it's everywhere and everyone is transparent about, for the most part, about what they get done. When this entrepreneur med spa world first started, things like the corporate practice of medicine, these like legal buzzwords, medical director, delegation, no one knew what the, what any of it meant. And then there were attorneys and law firms that came into the picture to provide some clarity. So now we're, that's, you know, 10 years ago. Now we're fast forward five years and the world of compliance is doing a really great job at that first piece, like making sure you have the right agreements in place, making sure that you've, you can find them on the Internet for relatively inexpensive to have a management service agreement. All of these are buzzwords. But what we're really seeing now is people have because attorneys have made things accessible in certain ways that they have the documents in place, they've dotted the I's, they've crossed the T's, but they aren't acting compliant. You know, they have a document in place saying that they have a management service agreement. So they aren't fee splitting with their physician, but ultimately, at the end of the day, they're fee splitting with their physician. And so boards of medicine, courts, they really don't care what your documents say to what we just said if you're not actually acting in a compliant way. So I think 2025 will be the year of a business. It's like, I want to put this on a T shirt or something. It's a little bit verbose to put for what I'm about to say, but like, you need to look inward because it is coming. Texas and Illinois just recently, in the past month, completely redid all of their medical aesthetics laws. So now they have laws specifically related to the world of medical aesthetics. And we further eliminating some of that gray area. And we have, you know, the Department of Justice in New York just recently cracked down on an esthetician who was not only injecting Botox brought in from another country, but was operating outside of the scope of their license. And now that person's in federal prison. So we've got a lot of look at the more inward operations. So contracts are great, but the contracts aside for a second, are you zooming out and being like, this is the practice of medicine and am I operating the way the practice of medicine should be? So the big issues are physician oversight. If you're, if you're in a state that's not full practice, or if you are a state that is full practice for an APRN or mid level, do you have proper oversight for them? Meaning are they helping draft your policies and procedures? Are they actually overseeing the practice of medicine? Are they saying, yeah, here's my license, go order, go open up some accounts with Allergan, go open up an account with MERS and get what you need and let me know if you need anything. Because 50, all 50 states, that is illegal, you cannot do that.

[Ricky Shockley]

Is that what most people are doing in reality or some version of that?

[Courtney Walker]

Yes. Where their physician has no idea what is actually going on. So if you are doing that, then this is the year that you need to really look inward and sure up some of your actual practices to make sure that you're complying with the practice of medicine, corporate practice of medicine. So oversight and delegation, huge issue. And Then do you see a crackdown on that?

[Ricky Shockley]

Is that, is that more of just like out of an abundance of caution, preparing for a potential crackdown, or do you see an actual crackdown happening on that front?

[Courtney Walker]

Yes, there's absolutely a crackdown happening. In Texas. Someone recently just got their license stripped from them for they are never allowed to supervise ever again because they delegated to, they delegated to someone who was unlicensed and they ended up doing an IV treatment. The patient passed away and, and the physician had no idea what was going on in that practice. And yet they're, they're responsible for the supervision of that. But people are like, you know, there's, there's multiple articles of the practice owner and the physician being called off in handcuffs. It's. Yeah, it's a real, is it mostly.

[Ricky Shockley]

Triggered by an issue or patient complaint or something like that at this point? So, so basically it's a ticking time bomb. If anything ever happens to you, like, they're not necessarily going out and like searching for everyone's documentation and doing any sort of an audit necessarily, but if something comes up, you're going to be in major trouble if you don't have these things actually buttoned up. So it's just, it's another, you know, way to reduce risk is to make sure that you're actually operating in a compliant manner. So if anything ever does happen, and the bigger you get, the, the longer you're in business, some of these things become inevitable. You're gonna have some person that's angry or run into an issue and you just want to make sure that you've got these things buttoned up. It sounds like.

[Courtney Walker]

Yeah, I think if something happens, if someone dies, you're for sure getting for sure going to be like even adverse.

[Ricky Shockley]

Reactions to like Botox or something like that. Like these practices that have like a physician that's really not in the day to day that are maybe not acting in a fully compliant manner, you're putting yourself at risk as a result.

[Courtney Walker]

And I think also, you know, if something bad happens, for sure, but then if you have enemies, if you have people up the road who see you as competition, they absolutely can report you. And then it's up to the board to investigate. And of course the board's investigating lots of, be it the board of nursing or the Board of cosmetology or Board of Medicine, they have a lot to investigate. But then it's up to them what they do with it. And if they decide to make a big, you know, a big to do about medical aesthetics. My fear is, and for people who are listening is I do believe that boards are, they're being forced to make a big deal because people are actually getting hurt from people bringing in counterfeit medication, unlicensed providers. So I don't think people. It's not all, it's not all coming from physicians just renting out their license and people not acting compliant. But what I fear will happen is in this big pendulum swing of the board really isn't doing anything about it now. Patients are getting hurt. It's all over the news now. The board is being forced to do something about it. Even though you weren't perhaps the reason that they got tipped off, you're going.

[Ricky Shockley]

To be subject to the enforcement changes.

[Courtney Walker]

You're still going to get caught up in the mess.

[Ricky Shockley]

Yeah. Is it, are there any action items, like for the people that you feel like that they've kind of just gotten away with that and that's just kind of how the business has operated for, for so long. Like, are there things that you can do that kind of help you reduce liability? Like with, like just. Should you be sending like a weekly report to the physician about things that are going on in the practice? Like, is there some sort of simple action item?

[Courtney Walker]

Yeah. So I think practice inward. So assuming that the physician is not on site, practice inward. Take an account, a full roster of everyone who does anything related to medicine in your practice. First question is, what is their license? Their license, Are they governed by the Board of Cosmetology as an esthetician or they an rn? Or just take an account of all that, make sure their license obviously is intact. That's very important. But then also make sure that they're only permitted to perform the services that is within their scope of practice. So make sure you don't have an RN who is doing something that only an APRN should be able to do. So that's, you know, practice looking inward and then practice looking outward. Your relationship with your medical director, it's defined in state statute, like what exactly a medical director has to do for their oversight. But the medical director should have a say in how the practice operates. And I say this, a medical director I'm really familiar with, I would never let him inject my lips. He does not know the right fencing method on how to inject lips. But what he does know is what to do if you get a vascular inclusion. He does know the actual practice, but maybe not like the most skilled practitioner. Medical director is not required to be the most skilled practitioner, but they need to understand the overall practice. So if you're a practice owner, I would sit down with your medical director and go over every policy and procedure you have related to the practice of medicine. So you don't have to have your medical director sign off on your cleaning schedule or whatever. But if it's related to the practice of medicine and how emergencies are performed, I would have your medical director review those, sign off on them. A monthly report is certainly something that is awesome in Tennessee, the requirement and I like Tennessee law related to med spas. And so if you're trying to be overly cautious, I think it is a good mechanism to. In any state. But in Tennessee, you have to have a site visit every month with your medical director. Ten of those can be remote. So you can just have a video chat, talk about any adverse events that you had or I just got a notification that it cannot have access to my video. Can you see me?

[Ricky Shockley]

I think it's back. It just went blurry for a second, but I could hear, Sorry.

[Courtney Walker]

It popped up and I was like, oh, okay. So Tennessee, you have a remote site visit or a site visit requirement every month. 10 of the 12 can be remote. And your medical director has. Your med spa has to be registered with the state. That's obviously a state requirement that you can't do if you're in another state, if your state doesn't have that board set up. But another thing that I would encourage a lot of people to do is there's a hesitancy to affiliate your medical director with your med spa. And to be honest, it makes zero sense to me because if anything, as a patient, it adds validity to your practice. This is the person who knows about medicine, went to med school and is in, is responsible for it. So we have a requirement in, in Tennessee that the medical director has to be on like the door of the med spa. Like anywhere a patient encounter would happen, the patient has to be kind of presented with that information. This is the medical director. So I tell clients when I'm doing like a compliance audit, if I can't find your medical director's information within five seconds of going to your social media or go into your website, you're not doing your job. It needs to be like, I need to be able to readily access who's over the practice of medicine. Now, that's not required in every state, but I think it's a good. If you're trying to just be proactive about any of the potential, the hammer that will come down. Those are good things to Good, good Measures that you can take.

[Ricky Shockley]

Cool, I love that. Anything else on that topic?

[Courtney Walker]

No. I mean, there's so, so much to talk about when it comes to it's. It is essentially the foundation of any med spa business that is not owned and operated by a physician. So it's such a hefty topic that we could talk about for. Yeah, for days.

[Ricky Shockley]

And I'm assuming there's probably just a lot of people that aren't actually doing it the way that it's supposed to be done. And, and since it's not necessarily to this point been like, proactive, people aren't like, going out of their way to try to find enforcement opportunities, but when they arise, it becomes a problem. And just getting ahead of that in terms of just assessing risk and minimizing risk is obviously a very good idea.

[Courtney Walker]

Yeah, I think if I was, you know, gave some actual action items. But if, you know, you're wanting to do some research, if you're listening to this and you want to do some research, I would research delegation laws and supervision laws. And so delegation is who your physician can do, who, who can perform acts under the supervision of your delegation. So they are, you know, they're related in some way. So delegate is who can the physician give something to? And then supervision is how does the physician need to supervise that delegation? But that's a really good. You know, I would never.

[Ricky Shockley]

Yeah.

[Courtney Walker]

Turn you to Google, but if you need to Google something, those are at least like the words to look for.

[Ricky Shockley]

Yeah, got it. Anything that you find is like common pitfalls where people maybe let things slip in terms of like contracts and agreements, whether that's with vendors, leases, staff. Any common themes that come up in your line of work?

[Courtney Walker]

Yeah, there are a few. And I think the biggest thing that I will tell people is that there is an assumption that a contract cannot be negotiated. And in certain circumstances it absolutely cannot. Like, like we mentioned or we talked about before the podcast, like when you go to @t, that's what we call a contract of adhesion. You take it or you leave it. You go to Verizon if you don't enjoy what AT&T's contract has to say, or Apple, you know, every time you have to agree to their terms and conditions, congratulations, you don't agree to them, but your phone is now useless. But in the general vendor contract world, they absolutely are negotiable and you should negotiate those things. So we can start off with just vendors in general. Some things to look out for. Auto renew provisions are huge. It's A huge pitfall in this world. And not just the world of medical aesthetics, but the world of business in general. So I reviewed a contract last year that the term of the contract was only for a year. So okay, not the longest term, but then you get down to the end of the contract and it has an auto renew provision. And so if you did not notify someone at the company and there was a specific name that you notify, if you do not notify them, no sooner than 180 days before the contract is over, but within 90 days before it's over. So you had like a 180 day, 90 day window, then your contract renewed for three years at 200% the rate.

[Ricky Shockley]

So that's enforceable.

[Courtney Walker]

And it's, I mean, are you. So the question of it's enforceable is like, are you going to sue? Are you going to hire an attorney? Are you going to get. So immediately it's like, we do not agree to that. Like strike that. Not that notice provision. That's pretty, that's pretty normal to have like a window that you have to notify someone, but when the contract term is 12 months and now I renew for three, three years, that's insane. So just being knowledgeable about those things and negotiating and if you do have an auto renew provision, calendaring it out so you get within that window. The other big thing is like choice of law and venue clauses. So in a, in a contract, especially in a commercial setting, you can pre agree of what law applies and where you would bring a lawsuit. No, you might be reading it and think, well, I'm not going to sue them anyway. But I had a contractor reviewed recently, fairly recently, that the venue was in the United Kingdom. So to sue on this I had to go to the United Kingdom or I had to argue about why the United Kingdom was not the appropriate choice of venue for this. So you know, making sure if it says, and that's in a lot of the contracts we sign every day where the choice of law is like Florida, even though you're not there. So that only becomes really important. And that's what you have to decide when you are signing a contract. Like, would this be something that I would really go? Like, is my risk so high I would be suing someone anyway? Because if the answer is no, then like maybe it doesn't matter. But if the answer is super high, like if it's a, you know, a big transaction of multiple pieces of medical spa equipment, maybe you would if they didn't perform like they were going to. Well, you just need to be aware of where it is and that is absolutely negotiable. You should push back on that if that's something that you want and just being smart about it. But the choice of law is also like you agree that Texas law applies, even though a court in Tennessee is going to hear it like Texas law will apply. So just being wary of all of those, those pitfalls. And in the commercial lease setting, the biggest thing that I think I see is insurance. What are the insurance requirements of the facility? If it requires you to have insurance, you absolutely need to have insurance for it. I had a client when I was in private practice that their lease required them to have fire insurance and certain amount of coverage and they did not have it and the building caught on fire and the landlord did not have that insurance and it was a big deal. So if the lease requires it, then you need to have it in place. If you don't intend to get it in place or you need to get, you want to do something else, then you need to negotiate that and then the similar of, you know what the other one for leases that I can think of is what you're allowed to do on the premise. So if it says you're allowed to only operate in med spa, I encourage clients to get that or to negotiate so they can get that change to any lawful purpose. Because what if this is your a brand new med spa and it's a five year lease and you decide six months from now you don't enjoy operating a med spa, but you enjoy operating an embroidery shop. Now you're in breach of the lease even though you are still paying your rent on time and you're still doing everything. So just like small little tweaks from that can protect you should things shift and you need to move to a different direction.

[Ricky Shockley]

You can, I assume that's even true if you're like a plastic surgeon or a physician and you planned on this being a med spa and then you want to change use cases for that, even if it's just that specific office space. Like, hey, we're actually gonna move the med spa operation to the other spot. I'm just gonna make this my, an extension of my physician's office. But now it's, you're in violation of the lease agreement. So. Yeah.

[Courtney Walker]

And I mean I can't, I can't imagine a landlord would be, yeah, not okay with that. But if you're trying to think ahead any of those changes even you're like, no, I know this will be a med spa. For five years, then what's the harm in just still putting it as any lawful purpose? Even if it's any lawful purpose related to the business? Because in your point, if it's a plastic surgeon's office and then a med spa, you could make the argument that turning it into another office for the plastic surgeon is related to the business. That's what another service is. So just protecting yourself and thinking like what could change and how do I make small tweaks to this to make it more favorable to me?

[Ricky Shockley]

This episode is brought to you by Med Spa Magic Marketing, my agency. We help med spas and aesthetics practices grow with more effective marketing strategies. And I know that's a vague phrase, right? That's a vague claim. So I have an offer for you. I offer this to any new prospects if you're interested in exploring any of them. Another marketing option, a new agency, or just getting into Facebook, Instagram, Google Ads for the first time. I'd love to show you why we're different, what we're doing for clients. And we can do that via a one and a half hour planning session where I'll outline a specific marketing plan and I'll give you all of the blueprints that we would implement if we were to do business together. Now you can take that, use that on your own, hire someone else to help you execute it or work with us. We really don't hold anything back on that strategy call. And I think you'll have a lot of confidence in how you manage your marketing investment moving forward, understanding some of the nuances that can help you implement more effective marketing strategies for your business. So if you want to do that, you can go to medspa magicmarketing.com I know one of the things we talked about in our preliminary conversation that I was not informed about was I remember this news. I don't even remember when this was, summer, maybe earlier, about non competes and as practice owners, when you've got injectors and providers who you're probably constantly worried about going to start their own thing or get recruited by the med spa down the street. I remember the initial news and then I don't remember any of the updates and I was very surprised with some of the things that actually played out from that. Can we talk about that just briefly? Because I know that's probably something that's been on people's radar, at least I.

[Courtney Walker]

Will be as brief as I can, but it involves the constitution and it is one of my passion projects. I just, I adore in a very unhealthy way the Constitution. But so last year the after a long time of public comment on the proposed rule, the Federal Trade Commission issued a, a ruling that said nodding competes are banned nationwide because by the name, if you're not familiar with Federal Trade Commission, it make sure trade is fair. And so immediately, immediately when that ruling came out, which we kind of knew it was going to come out because the way that these things roll out is like they propose a rule and then it goes before the committee and then it's open for public comment and then they issue a final rule. So when they issue the final rule, the immediate response from the majority of attorneys is that's not constitutional. Which just means that this is not your sandbox Federal Trade Commission. This is a state law issue. And so we have our three branches of government for a reason. And one of the ways that we can impact this type of like nationwide ruling is through Congress or we leave it to the state. So a really good unrelated example of that is there is not a nationwide requirement that the drinking age be 21. That is a requirement that was created by Congress that to get federal funding for your roads the drinking age in your state has to be 21. So there have been states who have said no, we want the drinking age to be 18. And then they don't get federal funding for their roads and then they quickly change their minds because their neighbors roads look much better. So that's the way that this would normally work. And so now you don't even have Congress. You have an entity created by Congress that says banned across the United States. Okay, so that's like your constitutional lesson for the day. So then we had courts who stepped in and said FTC, you can't do this. It is a state law issue. And so far they're the FTC and there's not been a resolution. I think originally the FTC said they were going to fight it. It sounds like they are still going to fight it. But as of right now, non competes remain a state law issue. So what you need to look at if you are drafting an employment contract for non compete, every state is a little different. That's why it makes it a state law issue. But primarily what you're the key word to look for and it's pretty uniform across every state is a non compete has to be reasonable. So if I as an attorney am entering into a non compete with a law firm, they can't say if you stop practicing law here, you can't practice law anymore for five years. Okay, so They've completely restricted my license. That's not reasonable. But what they, my prior firm was, I did a lot of commercial real estate mergers and acquisitions. So they reasonably could say that of course I can't represent any of the clients that I represented there. That would be reasonable, but that I can't practice those types of law within a certain year range or month range in a certain jurisdiction. So maybe it is in East Tennessee where I live. So you have to create some reasonable parameters. There's a lot of resources online that help you understand in your state what's considered reasonable. But things like one year, 50 miles patient practice, specific information like those are pretty common terms. So for medical aesthetics it would be, you can't practice in the world of medical aesthetics for one year, 50 mile radius of the practice location. That is, I won't tell you that that's compliant in your state or that's enforceable. But those like three individual pieces are what you're looking for to have a non compete that, that would be enforceable.

[Ricky Shockley]

Do, do most med spas have a non compete in place with their providers? I actually don't know the answer to that.

[Courtney Walker]

Yeah, a lot of med spots have non competes. They have a lot of things like they own the before and after pictures or anything. So not only do they own them, but if the provider themselves posts them on their social media, then they are required to take them down after they leave. Non solicitation of course is really a big deal. And those are all called restrictive covenants. So we're saying we are after you leave here and you get out of this contract because you're no longer employed here, you, we require you to abide by certain provisions of the contract for a specific time. And so the reason that courts like are really hard on them is because you're, you're still controlling someone even after they're not employed. You know, we can control people a lot when they're employed by us. Like to remain employed, you can't do these things. But even after they leave, you're still restricting their ability to be, you know, user license or to be in the industry in some way. And so that has to have some level of reasonableness and you have to prove it on the front end too. Just because someone comes and works for you a day doesn't necessarily mean your non compete will be enforced. But are you giving them things like free training? Are you teaching them something about the industry? And that's why I said my old law firm, because I was brought in and had no Experience in certain elements of that I did bring a book of business, but I know experience in some of the, in some of the areas that they taught me and so they put a lot of resources into me. So I think, you know, a non compete in that area would be enforced if, if it would be enforceable, if, if the other areas were reasonable like the mileage and you know, the time. Time period for that.

[Ricky Shockley]

Yeah, makes sense. I know, I know we're going a little long. Do you have a couple more minutes just to talk up on the AI part of the conversation?

[Courtney Walker]

Sure.

[Ricky Shockley]

So I was scrolling your Instagram and I know you're really into the ChatGPT and AI and how to use AI for compliance. So I wanted to talk about that a little bit and feel free to like promote the stuff that you're going on because I thought it was pretty neat in this part of the conversation. So do you want to just give us like AI applications related to compliance and legal or anything else that you're doing on that front? So I thought that was interesting.

[Courtney Walker]

Sure. So my story of my Instagram handle for anyone who's listening is court approved aesthetics, which I thought was probably one of my more clever play on words for Courtney, the attorney. Yeah. So my introduction to the world of medical aesthetics was born out of necessity because the world of compliance is often very difficult to understand. There's a lot of varying answers. I'm part of a couple of Facebook groups and even in that group you'll hear varying answers from people. And attorneys are really expensive. So I started Smiley Aesthetics with my two business partners and I am the attorney piece of that partnership and in bringing compliance to the people who are fall under our umbrella and we were able to build. Now Smiley aesthetics is in 12 states. We have nine brick and mortar locations and don't even know the count of the number of providers who kind of fall under our general umbrella. And so my piece has always been interpreting laws, understanding the ramifications, keeping up with things like the GLP1 and how do we navigate the situation. And so when I transitioned and sort of having private clients, I ran into this issue of well, attorney time is really expensive because one, it is really expensive to be an attorney on the front end. But two items, it's because we have a limited amount of time. And so what would happen if I could help my clients get. I think you use the number like if I could help my clients get 80% there. And so I started building out and I was already using the word the chat GPT I'd already built out a couple of bots to help streamline the way that I answered things. So I had a bot that was built out that was essentially, you know, a clone of how I respond and how I answer to emails in my job as the chief legal officer of Smiley Aesthetics. And so when I said, hey, write me an email, I need it to say these things. The bot would write it as if it sounded like me. And I trained it through using previous emails that I drafted. And it like, taught it how I sound and how my normal cadence is. It's hard to really put into a bot the southern twang aspect of it, but it comes out every now and then in the answers. But how do I use all of this knowledge to help people get 80% there without the astronomical attorney fees that are associated with it? So I started helping clients build specific med spa trained AI bot. So I have a bot for Lisa's. Her name is Lisa. And all Lisa does is she has the coding from me on the back end of. If you were to come to me and say, hey, take a look at this commercial lease and let me know what you think. What I've coded Lisa to do is if I was looking at that lease, let's pull out everything that would be important to me. Let's give the section reference and let's, you know, flag it as high risk, low risk, medium risk, and put that in a memo form. Because if I was sending an email back to you, I'd be like, hey, here are the things that stand out to me. So Lisa helps get that process without me ever touching it. And the 20% then can come from the person who's using it and reviewing what Lisa did, asking specific questions about any of those things. And I still use Lisa. I mean, I. In the background of a podcast I did on Friday, I had a couple of commercial leases to review for clients. So I rent. I dropped them in Lisa before I started the podcast. And so then after the podcast was over, I reviewed Lisa's memos and then immediately started looking through the lease and, you know, confirming things on my own end and then got a summary back to the client. So it's just a way to use a really helpful tool to speed up the process and to answer some negotiations. But there's a whole fleet of AI bots that is my clients have found to be really helpful.

[Ricky Shockley]

That's awesome. I love that. Have you found any, just out of curiosity, like any other uses in the, in the business, or have you just been. You're Obviously focused on your lane. I understand.

[Courtney Walker]

Yeah, I actually have. So I have a three tier membership approach. So they're I similar to court approved aesthetics. I enjoy a good pun and play on words. So I have a junior associate membership, a senior associate membership and a partner membership, which that's what you would experience trajectory wise in a typical law firm. So junior associate is for businesses in general, not Med Spa specific. So commercial lease. Lisa. Absolutely included. But things like I have Bessie, who does revenue goals I have or I'm sorry, C.J. who does revenue goals. Bessie, who helps with tax audits and helps businesses, depending on their tax classification, figure out their deductions. So those are not Med Spa specific, just business specific laws. And I've got like real estate agents, you know, hair salon owners, all kinds of people in that entry level. AI membership, senior level is for Med Spa specific. So there's a lot of Med Spa related bots and we have a lot of discourse in the forum about med spa laws. And then the partner is a one on one, like you want me to be your attorney that you would see in a traditional, in a traditional practice. But to your question of other uses, there's the revenue bot. I built it to help me understand, like this is a revenue goal I want to see for 2025 for myself personally help me figure out how to get there. Like I've got all of these services and here's all the things I do, how do I get there? And as I was building and coding the bot, it originally said, oh great, your most expensive offering, which is your partner membership. Why don't you just do 300 of those a month and then you're good to go. Like, because I don't have an endless amount of time, this is not realistic for my time or for my population decline I'm serving. So I worked with it to give feedback and then now it's like, okay, now I know revenue wise, if I want to hit this goal, this is my breakup. And this is what it looks like if you just shift one of those things a little bit. And in the Med Spa space I found that to be really helpful. It will never replace a cfo. It will never replace someone who knows the ins and outs of your business and provides real strategy. But if you're just looking for, I gotta have this general sense of how I can reach, I know where I want to be, but I don't really know like the day by day, the week by week, the month by month, like what that looks like and how far off I am from hitting those goals. Those. The bots can really help fine tune that. And so then you give feedback at the end of the week. Like, I wasn't. I didn't reach this goal this week, but here I am. What does that do for my trajectory? And you're not having. If you don't have the resources to hire a fractional cfo, you're. You're able to figure some of those things out in a way that's at least more strategic than if you were doing it on your own and didn't have a background to support doing it on your own.

[Ricky Shockley]

Yeah, I love that. That's awesome. Courtney, thank you so much. Where can people find more about you and some of these things that you're up to if they wanted to work with you? I want to make sure those things are in the show notes too.

[Courtney Walker]

Yeah, I think the best place to find me is. It's on everywhere. It's a court approved aesthetic. So just court my half of my first name, which people call me approved aesthetics. And I talk a lot on Instagram. That's where the majority of my content is. And then it goes to. You can connect from Instagram on my website, which is just courtapprovedesthetics.com and my passion is just making all of this information. If you can't tell from listening to talk about the Constitution, I just love distilling down really complex things in a way that makes sense to people in a way that they can run with it on their own. You know, I'm not your business partner, but I enjoy being a business guide because ultimately, ultimately I can tell you the compliance pieces. It's what I'm really passionate about. But it's up to you to make your business decisions that make the most sense for you. And I just want to guide people in a way that is geared towards compliance.

[Ricky Shockley]

Yeah, I love that. And it's a great follow on Instagram. I was just browsing through your Instagram page. You want to stay up to date on some of these things, like with what's going on with GLP1s and you want to source to make sure that you're up to date with compliance issues and things you should be aware of. I think that's. That's a great way to stay in the loop. So. So, Courtney, thank you so much. We look forward to hopefully having you on again sometime in the future.

[Courtney Walker]

Yeah, thank you so much for having me.

[Ricky Shockley]

Thanks everyone for tuning in. This podcast is a production of Medspa Magic Marketing. If your Med spa or aesthetic practice is in need of digital marketing services. Help with advertising on Facebook, Instagram, Google lead generation and booking more appointments, please visit Medspamagicmarketing.com.