Insuring Your Aesthetics Practice

by Sarah Lebo

Editor's Note: ADVANCE for Nurse Practitioners is proud to introduce a quarterly column specific to the growing medical aesthetics specialty. Look for future columns in May, August and November.

Among the many hurdles Louise Diehl-Oplinger, NP, faced when she opened the Lehigh Valley Wellness Center in Phillipsburg, N.J., was securing liability coverage.

"Getting malpractice insurance when you are in the process of opening up your practice is a painful and tedious process," Diehl-Oplinger told ADVANCE.

She encountered the greatest difficulty when she began investigating how to get a policy that covered the cosmetic services she wanted to offer, such as Botox administration and microder-mabrasion.

"I had a previous policy with Marsh and was in the process of upgrading to self-employed status. They contacted me many times for additional information, but the process was slow. In the meantime, I completed an application with NSO," she said. "Right on the application there was a question about cosmetic services. I was honest and checked off that I do cosmetic procedures and later disclosed that 20% percent of my revenue came from this. After some time, I called to see what the delay was and was told they did not insure any practice owner who does cosmetic procedures. They wouldn't even cover the medical portion of my practice alone. I felt like the application process was misleading. I had insurance with them for over 20 years without any incidents or claims."

NSO told ADVANCE that the company covers employed NPs who perform duties within their state scope of practice and the protocols of the facility where they work, including aesthetic services. However, coverage does not include aesthetic services provided by self-employed NPs or independent contractors (but self-employed NPs who do not provide aesthetic services can be granted coverage).

Lien Dretke, NP, had a similar experience when she researched the feasibility of opening her own practice. She practices at an internal medicine clinic in La Grande, Ore.

"I contacted my insurance carrier and inquired about coverage for cosmetic services. I stressed that I had no current plan to add the cosmetic services and that the phone call was only an inquiry," Dretke told ADVANCE. "A few weeks later, I received a letter from the company stating they wouldn't renew my policy upon the expiration of my coverage."

When Dretke wrote back and explained her situation, she was informed that in order for the company to consider renewing her coverage, she needed to send a written statement that she would not perform cosmetic procedures.

Many nurse practitioners who venture into the booming field of aesthetics are facing similar malpractice insurance struggles. Some aren't even telling their current insurer that they've begun doing cosmetic procedures for fear they'll be dropped.

"I really don't know why the coverage is so hard to get," Diehl-Oplinger said. "I can only think that the tragic stories you hear about botched plastic surgeries and other skin procedures with terrible outcomes may be causing insurance companies to be overly cautious."

Cause for Hesitancy

As far as insurance companies are concerned, medical aesthetics is still uncharted territory. Just how litigious the field will be is anybody's guess, and states are just starting to enact legislation about what kind of training is needed and who can provide these services.

"Most insurance companies cover nurse practitioners who are practicing within their scope of practice," explained Melanie Balestra, NP, JD, a pediatric nurse practitioner who also owns her own law practice. "The concern of the insurance companies is the liability associated with aesthetics. Initially, most of these procedures were only done by plastic surgeons. Also, in this type of practice, you are dealing with emotions. A patient may have a different idea of what he or she may or should look like after a procedure."

Two of the best defenses against any potential lawsuits are thorough education and informed consent.

"Most of the complaints from my clients' patients have involved laser burns that were the client's fault, not the nurse practitioner's. For example, the patient goes skiing or to the beach after having a laser procedure," Balestra told ADVANCE. "The most important advice I give my clients is an old one: documentation, documentation, documentation. This is the one thing that has saved my clients." (See the sidebar on page 22 for more tips on how to protect yourself.)

Investigating Policies

When researching potential insurers, nurse practitioners will find few that provide coverage for medical aesthetics.

Marine Agency and Professional Program Insurance Brokerage are two companies at the forefront of offering it. Marine Agency (www.marineagency.com) offers medical aesthetics coverage to nurse practitioners in 50 states.

"We will insure independent contractors as well as the owners of the practice," said Mary Lynne Blaesser, director of marketing for the company. "We have several different policies available, from cosmetic services through medical services, including microderma-brasion, laser and Botox. All coverage is subject to state and federal regulation and licensing guidelines."

If your practice is devoted to aesthetic procedures only part of the time, you probably need another insurer for the medical portion of your practice.

"Our policies do not cover any services other than the ones covered specifically in our policy — laser, intense pulsed light, etc. No per diem nurse practitioner work is covered," Blaesser said. "It's important to tell your agent if you have other coverage in place, so that coverage is not duplicated. People are often reluctant to give us information, but not having complete information can prevent us from properly protecting their assets and meeting their needs."

At the time she was interviewed, Diehl-Oplinger had a quote from Marine Agency on her desk. She said the annual quoted cost was $523.75 for basic coverage, with additional amounts for specific services. Botox injections and laser treatments are grouped together and have annual premiums that start at $5,500.

Professional Program Insurance Brokerage (www.medispa-ins.com) offers policies for permanent makeup, microdermabrasion, peels, sclerotherapy, dermal fillers and laser treatment in every state.

"Many nurse practitioners often don't realize that their regular malpractice policy will not cover this kind of work," explained Susan Preston, president of Professional Program Insurance Brokerage. "They have to understand they're entering a whole new ball game. For instance, laser has a good potential for damage from hyper- and hypopigmentation, and people might think they're seriously burned even though they may not be. Nurse practitioners need to have a first line of defense if there's a problem with this and other procedures."

Premiums sold by Professional Program Insurance Brokerage range from $1,000 to $6,000 per year, depending on what kind of services are provided and included in the insurance package.

"We're a little different from most insurance companies in that we guide our clients in how to set up this kind of practice and insurance," Preston told ADVANCE. "We try to help people understand what they're going to have to tell people prior to doing a laser or Botox procedure. Many policies assume nurse practitioners are working for someone else or some medical entity. We understand that NPs are becoming business owners in this area, so we provide resources, such as appropriate forms for them on our Web site."

Both companies specify how much training nurse practitioners need for whatever insurance coverage they're applying for.

"If they're going to do laser or intense pulsed light therapy, we require 1 year of experience or 30 hours of training as a minimum," Preston explained. "For Botox or fillers, we require 15 hours of training and at least 10 procedures in each of the product categories." A letter from the provider who proctored the procedures is sufficient.

State Provided Protection

Another option to consider is a patient compensation fund (PCF) — if it is available in your state. These funds were created in response to the increased cost and reduced availability of medical malpractice insurance.

"Louisiana provides a PCF, which I participated in 4 years ago as an independent contractor. I was also insured with NSO," said Cindy Cobb, NP, who practices at Coccolare Spa in Lafayette, La. "I dropped the PCF because I became an employee of a spa and was no longer an independent contractor. However, I am planning to rejoin the PCF here because of the significant amount of laser work I do. A physician I work with recommended I do that."

You can find the details of the Louisiana PCF at www.lapcf.state.la.us. Other states' information and an overview of PCFs can be found on the Shand Morahan & Company Web site at www.shand.com/PCFBrokers.9-22.doc.

At the 6-month anniversary of the opening of her practice, Diehl-Oplinger was still researching her potential insurance policy. She decided against offering Botox injections because of the additional cost of insurance coverage and New Jersey state restrictions that an on-site physician sign for Botox purchases.

"Nurse practitioners in private practice cannot afford premiums of greater than $5,000 for the aesthetic portion of their practice – especially when you also need regular coverage," she said. "It seems that the insurance is very high for this type of work, depending on what procedures are offered."

Sarah Lebo is the associate editor. Reach her at slebo@merion.com.