Across the country, state regulatory bodies are cracking down on violations at medical spas, serving as a cautionary tale for med spa owners everywhere.
In New York, a December 2025 report on medical spas from the New York City Council’s Oversight and Investigations Division (OID) is as much a crackdown on violations as it is a sign of today’s increasingly more stringent regulatory climate.
OID coordinated inspections by local agencies of 15 medspas across New York City. Investigators documented a wide range of violations across the inspected medspas and identified violations in all of them.
- 100% offered medical procedures without the required licensure and oversight
- 93% failed to display licenses properly
- 86% missing required safety records
- 73% operated without any medical professional present to oversee medical procedures
- 63% had chemical or fire safety violations, such as improper storage of hazardous materials
- 60% lacked proof of liability insurance
- 53% had sanitation and hygiene failures
- 46% had labeling issues, such as medications in unmarked or handwritten bottles
- 26% relied on unlicensed practitioners or those with expired licenses
The case highlights how consumers face risks, and med spa owners risk lawsuits and license revocation when businesses don’t comply with regulatory and licensure requirements.
Meanwhile, an increasing number of clinicians are entering the aesthetics industry to meet the growing demand for med spa services.
The report and its consequences for the investigated med spas are an important reminder that even small business owners in the healthcare industry can face scrutiny with massive professional and financial consequences.
In response, the American Academy of Dermatology Association urges New York state lawmakers to pass legislation requiring aesthetic businesses, including hair and nail establishments, to clearly disclose to consumers that they are not licensed to perform medical procedures. They also recommend a public awareness campaign to help consumers understand the differences between med spas and board-certified dermatologists.
In Indiana, lawmakers advanced legislation that would significantly expand regulatory oversight of both drug compounding and medical spa operations. The hope is that registration and expanded oversight will likely raise operational standards, increase transparency and improve safety.
In this case, the American Med Spa Association suggests the bill is intended to generate revenue from the sale of compounded GLP-1s, with large pharmaceutical manufacturers hoping to squeeze out competing compounding pharmacies.
Regardless of the cause of the increased scrutiny and regulation, incidents in both states signal a broader shift from treating med spas as loosely supervised aesthetic businesses to treating them as healthcare clinics.
The good news is that med spa owners who are serious about compliance and delivering care within their scope of practice shouldn’t face additional burden from the stricter enforcement of regulations.
Whether you’re a new med spa soloprovider or an established business owner, regularly reviewing your compliance practices can keep your clients and your business safe. The following are our top recommendations for navigating the new regulatory climate.
Why Med Spa Compliance Should Be a Strategic Business Priority
Many med spas were built during a period of rapid growth and relatively little oversight. It should be no surprise that scrutiny is heightened following market growth.
Rather than considering compliance a burden, owners should proactively conduct internal reviews to examine:
- Supervision agreements and delegation protocols
- Scope-of-practice alignment
- Documentation standards for procedures
- Informed consent processes
- Incident reporting systems
Why Proper Documentation Is Critical for Med Spa Liability Protection
In a professional liability claim, documentation often determines the outcome.
- Med spas should standardize:
- Medical histories and contraindication screenings
- Procedure-specific informed consent forms
- Treatment notes detailing product lot numbers, injection sites and techniques
- Post-procedure instructions
- Adverse event reporting logs
Without complete documentation, minor issues can escalate into major legal exposure.
How to Ensure Your Med Spa Insurance Covers All Offered Services
One of the most common vulnerabilities in any small healthcare business is coverage gaps. As your services expand, you must confirm your professional liability policies explicitly cover them. For example, if you offer Botox and then your clients start requesting GLP-1, talk to your insurance provider before expanding into weight loss management.
How Med Spa Owners Can Prepare for Inspections and Regulatory Audits
The series of surprise inspections in New York City is a good reason to always remain prepared. This includes:
- Maintaining updated licensure documentation
- Keeping supervision agreements accessible
- Conducting internal mock inspections
- Training staff on how to respond to regulatory visits
- Proactive readiness minimizes disruption and signals professionalism
- Knowing how to access your proof of insurance
Med spa owners who respond to the increased scrutiny by strengthening compliance, documentation, supervision, and insurance coverage will not only reduce risk but also improve operations. You’ll build a more durable, valuable and scalable business.
Frequently Asked Questions
- Why are medical spas facing increased regulatory scrutiny?
Medical spas are increasingly being regulated like healthcare clinics rather than aesthetic businesses. Recent state investigations and surprise inspections have uncovered widespread violations related to licensure, supervision, safety protocols, and insurance coverage. As the med spa industry grows, regulators are enforcing stricter compliance standards to protect patient safety. - What compliance issues most commonly lead to med spa violations?
Common compliance failures include offering medical procedures without proper licensure or supervision, operating without a medical professional on site, missing safety and sanitation records, improper medication labeling, and lack of proof of professional liability insurance. Inadequate documentation and outdated delegation agreements can also significantly increase legal and financial risk. - How can med spa owners prepare for inspections and reduce legal risk?
Med spa owners can reduce risk by treating compliance as a proactive business strategy. This includes maintaining up-to-date licenses and supervision agreements, standardizing documentation and informed consent forms, conducting mock inspections, training staff on regulatory response, and ensuring insurance coverage aligns with all offered services. Strong preparation helps minimize disruptions and demonstrates professionalism during regulatory reviews.
Click here to learn more about protecting your employees and business with med spa liability insurance.
