In WA State, massage therapists are licensed as health care providers. This means that they need to abide by health care laws which are a bit different than just a regular business.
A massage business must be owned by a massage therapist or a healthcare provider with more training/higher level of licensing than the massage therapist. For example: a chiropractor can own a massage business, a physical therapist can own a massage business and a massage therapist can own a massage business. A massage therapist cannot own or hire chiropractors or physical therapists in their business.
There is no written Statutory law that requires this but there is very strong case law that sets the precedent. Case law is established by the outcomes of prior cases, such as there is no actual law that requires police to read Miranda warnings to suspects but the court rulings established the necessity. Statutory Law is the term used to define written laws, usually enacted by a legislative body. Statutory laws vary from regulatory or administrative laws that are passed by executive agencies, and common law, or the law created by prior court decisions.
The Washington Supreme Court opinion in 2010 (COLUMBIA PHYSICAL THERAPY INC v. BENTON FRANKLIN ORTHOPEDIC ASSOCIATES) laid to rest any notion that the doctrine was somehow limited to physicians or that some professions are “real medicine.” Here are two very clear explanations from the Justices describing the relationship between a health care license granted by Washington and ownership and operation of a business:
The main case that deals with lay ownership in the healthcare field is Morelli vs Ehsan 110 Wash.2d.555,756 P.2d 129 (1988) which pertained to a dental clinic being owned by an accountant and dentist. The accountant was trying to sell their half. The Court of Appeals and later the WA State Supreme Court held that they partnership was illegal.
An earlier case State ex rel. Standard Optical Co v. Superior Court 17 Wash. 2d 323, 135 P.2d 839 (1943) which was prior to the enactment of Ch 18.100 RCW, the Supreme Court held it was illegal for a corporation to own and operate an optometry clinic.
Based on case law it is illegal for “lay persons” to own a health care practice since they do not have the license to make or intervene in health care decisions.
Massage business ownership is also directed by the RCW’s:
(12) “Unlicensed practice” means:
(a) Practicing a profession or operating a business identified in RCW 18.130.040 without holding a valid, unexpired, unrevoked, and unsuspended license to do so; or
(b) Representing to a consumer, through offerings, advertisements, or use of a professional title or designation, that the individual is qualified to practice a profession or operate a business identified in RCW 18.130.040, without holding a valid, unexpired, unrevoked, and unsuspended license to do so.
This chapter does not apply to any business or profession not licensed under the chapters specified in this section.
(iv) Massage therapists and businesses licensed under chapter 18.108 RCW;
(c)Formation of a professional service corporation under this subsection does not restrict the application of the uniform disciplinary act under chapter 18.130 RCW, or applicable health care professional statutes under Title 18 RCW, including but not limited to restrictions on persons practicing a health profession without being appropriately credentialed and persons practicing beyond the scope of their credential.
Unless a director, officer, shareholder, agent or employee of a corporation organized under this chapter who has been rendering professional service to the public is legally qualified at all times to render such professional services within at least one state in which the corporation conducts business, he or she shall sever all employment with, and financial interests in, such corporation forthwith. A corporation’s failure to require compliance with this provision shall constitute a ground for the forfeiture of its articles of incorporation and its dissolution. When a corporation’s failure to comply with this provision is brought to the attention of the office of the secretary of state, the secretary of state forthwith shall certify that fact to the attorney general for appropriate action to dissolve the corporation.
RCW 25.15 Limited Liability Companies
So What does all this really mean?
A massage business must be owned by a massage therapist or a healthcare provider with a higher level of training.
A licensed massage therapist can own a massage business. If you have a business partner, they also must be a licensed massage therapist.
A massage business can not be passed on to the massage therapist owners family members who are NOT a massage therapist.
You can’t be hired by a nail tech, estheticians, or hair stylists as they are NOT healthcare providers.
If you are choosing to be an LLC, you have to actually be an PLLC. (You can remain a sole provider if you want to.) The legal corporate entities in which healthcare providers may practice their profession are professional service corporations. (RCW. CH 18.100), professional limited liability company (RCW 25.15.045), professional limited liability partnership (RCW 25.05.510). Under the professional services corporation, all shareholders, directors and officers except the secretary and treasurer have to be licensed health care providers (RCW 18.100.0050 5a).
If you want to create a multi-disciplanary practice and become partners with Naturopaths or Chiropractors, you can form a PLLC and hire naturopaths and chiropractors as long as there is a naturopath and chiropractor as a partner in the PLLC.
Massage therapists can practice as co-owners with other disciplines EXCEPT physical therapists and Occupational Therapists. (RCW 18.100.050 5b. In a multiple shareholder corporation, the shareholder committing the malpractice or the shareholder who directly supervises and controls the employee is responsible in the case of malpractice. I need to confirm this. I found an old article by John Peick in the AMTA WA Journal which says this.
What’s the problem with non- healthcare providers owning a massage business?
The problem lies in that the owner does not know how to adequately supervise a licensed healthcare provider. Many owners will tell massage therapists to work on people with contraindications or on people with various conditions that the massage therapist may not have enough training and experience in.
The purpose of the corporate practice of medicine doctrine was to protect the public from the commercial exploitation of medicine which now includes massage therapists in the State of WA who are licensed as healthcare providers. The reasoning behind the corporate practice doctrine is to protect laypeople who are mainly motivated by profit which could possibly compromise medical judgements of healthcare providers and dealing with ethical issues in caring for patients/clients.
But the Board of Massage says it is OK.
There was even a lengthy discussion on one of the AMTA WA Convention panels back in 2015 where the investigator for the BOM, Shaun Atkinson, and John Conniff, the heath care attorney on this exact issue discussed this issue on stage in front of the attendees.
There were a few emails sent after the event that I got to read. I won’t share them here as they were between John and Shaun, but in general John Conniff talked about why he thought there was such a big disconnect at the DOH, when this law could specifically help them deal with the big problem of illegal massage businesses and a few other major issues in the massage profession.
The big problem is that people in WA State do not understand that ALL massage is healthcare in WA State…. ALL massage therapists… no matter where they work – at a spa, resort, wellness center or a medical/clinical massage office – ALL massage therapists are health care providers no matter where they work. The Corporate Practice of Medicine Doctrine is not limited to just doctors as see in the case The Washington Supreme Court opinion in 2010 (COLUMBIA PHYSICAL THERAPY INC v. BENTON FRANKLIN ORTHOPEDIC ASSOCIATES)
It may be that DOH has never thought about the potential power of using the doctrine in the context of massage and particularly, your efforts; but, DOH certainly knows how to use the doctrine. I have attached a Medical Quality Assurance Commissioner case (No. M2007-58443) “agreed order” that explicitly applies the doctrine to a case where unlicensed employees were working with physicians. Take a look at “Findings of Fact” 2.11 and 2.23 in the order.
In short, DOH can very simply tell LMPs that they may not be “employed” by a business whose owner is not a licensed health care professional whose scope of practice includes massage. Thus, another LMP could own the business or a physician, etc. I believe it’s a straightforward Uniform Disciplinary Act issue (violation of law). I also believe that DOH has not enforced the doctrine because of the economic issues involved and political pressure from those who have invested in “spas.” While I certainly understand these issues, ignoring the corporate practice of medicine doctrine won’t fix or make the legal issues go away.”
If the BOM says it is OK then why did many of the Massage Envy and other franchises owned by lay people go back to school to get their massage licenses? Why did one ME owner try to create a bill that would allow a lay person to own a massage business? She started that when she found out she could not sell her ME location to a business owner and not many massage therapists can actually afford to buy a franchise. House Bill 1981 from 2103 attempted to add this to Title 18.
7 NEW SECTION. Sec. 3. An owner is not required to be a licensed8 massage practitioner so long as his or her license massage9 establishment is affiliated with a national massage franchise whose10 major massage therapy protocols are set by a licensed massage therapist11 employed by the national franchisor and which does not participate in12 third-party billing.
So what can we do?
The real power in knowing this lies in building your massage business. If a business opens up near you and they are owned by lay people/unlicensed massage therapists, you could potentially sue them and say that they are disrupting your business and are an illegal entity. You would have to show how they are harming your business with the lower fees, lower paid employees etc. While I am not a lawyer, you could potentially win which would mean that they would be closed down. I have previously heard there were cases like this where the places were closed. (Still looking for the actual cases if anyone knows them.)
The other really big thing that could be done is to ask the Secretary of State for an official determination of the law. When I was working to start the new state massage association – WA State Massage Therapy Association – we actually talked about that and asked the lobbyist for AMTA to ask for the clarification. Their response was less than favorable stating something like ‘Are you really ready for this?” What would happen if something like this was done, is that the many spas and resorts offering massage therapy would be challenged and possibly put out of business. Another thing that might happen is that these businesses would get together to fight the law or create a new tier in massage licensing which would separate out spa/relaxation massage. This could potentially hurt the massage profession because really all massage is healthcare…even the sessions done in spas and wellness centers. To lose that would be detrimental to the massage profession.
The Secretary of Health is responsible for investigating complaints of unlicensed practice of medicine. They can issue a civil fine, or a temporary or permanent cease and desist order. The Attorney General may also take action against unlicensed practice. Unlicensed practice is a gross misdemeanor and each subsequent violation is a class C felony. (see WA Healthcare News PDF LLCs and the Corporate Practice of Medicine: A Modern Problem Raised by an Aged Doctrine )
In an Era of Healthcare Delivery Reforms, The Corporate Practice of Medicine is a Matter That Requires Vigilance. PDF
Stuart I. Silverman
WA Supreme Court Adheres to Corporate Practice of Medicine Doctrine and Clarifies Scope of Anti-Rebate Statue 03/19/2010 Lisa Rediger Hayward and Charles S Wright. Davis, Wright, Tremaine