The Fatal Drip: Jenifer’s Law and Unresolved Gaps in Texas Medical Spa Regulation

Iris Wang

Edited by Keerthi Chalamalasetty, Jasmine Iyer, Judge Baskin, and Sahith Mocharla

In July 2023, Jenifer Cleveland lost her life at Luxe MedSpa in Wortham, Texas after receiving an IV treatment by Amber Johnson––the owner of the medspa––who had no medical training and no license. Luxe MedSpa was supervised under the management services organization model (MSO), a structure for non-physicians to control administrative services for medical practices limited to operational and technical functions [1]. Although the event prompted physicians to assert more control over clinical decisions, Cleveland’s death highlights the lack of verification of physician oversight. The lack of structural enforcement to separate valid MSO models from invalid ones contributes to the inversion of clinical control. This allows for cases such as Johnson’s to obtain full clinical decision-making under the name of a physician, with no physician present. MSOs were designed to support physicians instead of capturing clinical control. This structural gap is one that the Texas Legislature’s HB 3749, or “Jenifer’s Law” responds to, but fails to resolve across all medical spa procedures [2]. 

This structural gap did not happen overnight; rather, it is the result of a century-long tension between professional medical standards and corporate expansion. The Corporate Practice of Medicine (CPOM) doctrine serves as a foundational legal principle for protections and regulations that originated from the nineteenth century American Medical Association (AMA) guidelines [3]. The doctrine itself acts as a guiding philosophy rather than direct regulations, supported by the 1889 Supreme Court decision in Dent v. West Virginia. Dent established the police power to protect the public through professional standards and mandatory professional licensing [4]. The CPOM aims to protect the public and the independence of medical professionals by ensuring clinical decisions are made by licensed physicians rather than corporations. This protection includes prohibiting non-physicians or business corporations from owning medical practices, employing physicians for medical services, or influencing clinical medical decisions [5]. As time went on, Texas implemented this doctrine by passing the Texas Medical Practice Act, which provides the statutory basis for the Texas Occupations Code and Medical Board disciplinary actions [6]. The Texas Medical Practice Act is a statutory prohibition on the use of a physician’s license to aid an unlicensed person in practicing medicine or allow another to use a physician’s license to practice medicine. 

Within these regulations, medical practices often utilize the management services organization model to delegate non-clinical responsibilities, ostensibly allowing providers to dedicate more time to clinical care. Because the CPOM prohibits non-physicians from owning or regulating medical practices, MSOs offer a “compliant structure” for private investors and business professionals to participate in healthcare administration [7]. When used correctly, MSOs are considered CPOM-compliant as physicians retain full control over medical protocols, treatment plans, and other clinical decisions. Meanwhile, the management services strictly control office management, vendor negotiations, financial oversight, and other business operations. 

However, these are the exact protections that failed at Luxe MedSpa. When the MSO model is used without a verification protocol, it allows unlicensed owners the opportunity to exercise clinical authority under a medical license of another physician; the exact scenario CPOM sought to prevent. Jenifer Cleveland’s case clearly highlights the operational failure of Texas’ medical safeguards at Luxe Medspa. In April 2023, Amber Johnson opened Luxe MedSpa in Wortham, Texas, with no medical training [8]. Johnson and Dr. Michael Gallagher, a licensed Texas Physician based 106 miles from Luxe MedSpa, agreed for Dr. Gallagher to serve as Luxe MedSpa’s medical director. However, following Jenifer Cleveland’s death, the Texas Medical Board began an investigation to reveal the details of how the medical spa was operated [9]. To begin, the agreed medical director, Gallagher, neither implemented policies and procedures nor had any protocols or standard operating procedures for IV services [10]. According to Chapter 157 of the Texas Occupations Code, a physician may only delegate medical acts to a qualified and properly trained person who is authorized to practice medicine acting under the physician’s supervision [11]. Johnson was neither qualified, properly trained, nor licensed to practice medicine. Even so, Johnson ordered the IV infusion containing TPN electrolytes that required a prescription to administer or purchase through an account using the medical director’s credentials. Additionally, the investigation concluded that Gallagher’s order of prescription medication to be administered by an unlicensed and unqualified delegate without adequate supervision presented a continuing threat to public safety. Not only did Johnson have no medical training or license, but she acted as both the individual administering and purchasing prescription medications (IV therapy), while also acting as the business owner of Luxe Medspa. Gallangher’s delegation to Johnson is impermissible, beyond irresponsible, and violates the MSO model requirements to strictly follow business and technical operations without performing or controlling clinical decisions. On October 12, the Texas Medical Board issued an order to temporarily suspend Micheal Gallagher’s license and revealed additional facts appending to choices leading up to the tragedy. Their investigation found that Gallagher was only on site at Luxe MedSpa on three occasions; one of which was the day of the incident “after or as a result” of the patient’s death [12]. Under the Texas Medical Board Act, all prescriptive delegation requires adequate supervision [13]. In Gallagher’s case, adequate supervision is questioned as Gallagher only visited three total times, implemented no protocols, and enabled an unlicensed individual to order prescribed medication. 

Therefore, the inadequate supervision and delegation to an unlicensed and untrained individual claimed legal responsibility for Jenifer Cleveland’s death on the one administering the IV treatment and the individual physician. By December 2023, the Texas Medical Board suspended Dr. Gallagher from practicing anesthesiology. The board also restricted him from supervising, delegating, or practicing medicine in other forms in all circumstances. 

An MD’s role should consistently be verified and enforced in medical practices to ensure all-around patient safety. Whether in healthcare systems or medical service organizations, it is crucial to maintain compliance between an MSO administration and the prohibition of corporate practice of medicine dictating clinical outcomes. 

Understanding the MSO model and the CPOM doctrine, business corporations have found a way to use the model to bypass state prohibitions on the CPOM, affecting clinical care [14]. When MSOs are unchecked frequently, healthcare delivery is compromised and raises questions on whether the healthcare received is prioritizing profit over care. Although MSOs function to provide administrative functions, some MSOs integrate so intensely that they effectively control the practice and influence medical decisions without violating CPOM regulations. Such actions include hiring and firing employees, recruiting clinicians, credentialing, and advertising. When combined with discrete administrative responsibilities with network aggregation and ability to control and invest capital into practices, the control within medical practices deepens the role of MSOs. Experts share rising concerns that a powerful MSO can invert the relationship between medical professional ownership and the MSO. If an MSO is strongly interested in obtaining increased profits, its motives may influence and conflict with a physician’s ethics and commitment to patient care. At Luxe MedSpa this inversion of power directly influenced the quality of care and commitment Gallagher could demonstrate for patients at Luxe MedSpa. Instead, Johnson took operational and clinical product control as well as treatment administration, extending administrative powers from the office room to the clinical field. Put together, this ultimately led to Cleveland’s untimely death. 

In response to Cleveland’s death, the Texas Legislature took a step forward to address the regulatory gap in elective IV therapy. House Bill 3749, Jenifer's Law, was signed by Governor Abbott on June 20 2025, and established delegation requirements for elective IV therapy administered outside of a hospital, physician’s office, licensed mental hospital, or other licensed health facility [15]. HB 3749 mandates only a physician, physician’s assistant, or Advanced Practice Registered Nurse may prescribe or order elective IV therapy, while administration may be delegated to a Registered Nurse under adequate physician supervision [16]. This direct and specific response is set to prevent situations where Amber Johnson, who was unlicensed and untrained, could legally administer IV treatments to patients. Because there had previously been no specific statute that addressed who could administer IV therapy in Non-Facility settings, HB 3749 closes this gap between the CPOM doctrine and the elective IV treatments administered outside licensed health facilities. The law strictly prohibits such ambiguity for IV therapy. Rather than focusing on how a business should be structured in administrative law, it brings awareness to the qualifications of the staff. 

However, HB 3749 highlights another gap between CPOM and the medical spa industry with the narrow application of the law, only enforcing requirements of administering treatments for IV therapy. Although HB 3749 is a step in the right direction to ensure regulations of medical spa procedures, this does not protect other aesthetic procedures. Outside of Texas, New York strictly enforces 100% physician ownership through a Professional Corporation or Professional Limited Liability to prevent non-physicians from owning any part of a medical practice and even limits non-physicians to MSO roles to proactively prohibit clinical interference [17]. Additionally, under the Education Law 6512, New York enforces a direct criminal deterrent by constituting a Class E felony for aiding an unlicensed person in practicing medicine [18]. In California, there is a strictly mandated “appropriate prior exam” performed by a prescriber before any medical treatment is delegated [19]. California’s Business and Professions code 2242 strictly prohibits any unlicensed, junior, or even registered nurse from performing this clearance exam, only delegating this for MD, Nurse Practitioners, or Physician Assistants. California’s approach is much broader than Jenifer’s Law as it applies to any medical treatment to require a prescriber-performed prior examination before delegation across all procedures. This notable difference targets the gap that would have prevented Amber Johnson from administering IV therapy, regardless of procedure type. Both New York and California’s regulations actively prevent unlicensed clinical practice, contrasting Texas’ narrow response to address a single procedure through Jenifer’s Law, based after a patient’s death. Such requirements enforce the prevention of unlicensed professional decisions to protect patient safety. The final HB 3749 regulation provides a narrow delegation requirement limited solely to IV therapy [20]. This means that other aesthetic procedures can still be administered under an MSO arrangement. Treatments such as Botox injections, dermal fillers, laser treatments, and chemical peels would not require a qualified and licensed individual to administer them as it was not specified. By excluding high-risk treatments such as neurotoxins and fillers, the Texas Legislature’s approach remains vulnerable in comparison to other proactive states. This brings the question that the law is reactive and only responds when tragedy or a specific death occurs. A legislation like Jenifer’s Law is not proactive enough to make change for the entire industry of medical spas. The same conditions that lead to Jenifer Cleveland’s death may be legally allowed for any procedure that the Texas Legislature did not name. 

In order to continue to prioritize patient care across all healthcare industries, new legislation must be made to close the remaining gaps. Reform can begin by regulating MSO agreements to be officially filed to the Texas Medical Board to prevent insubstantial MSOs. Being proactive in verifying the validity of a MSO agreement would be one step closer to ensuring patients receive professional and licensed treatment. Beyond IV therapy, the legislative reform of mandatory on-site physicians for cosmetic procedures should be extended to all treatments. This generates the compliance of regulating adequate supervision by the physician to maintain a safe environment for patients. 

The structure of regulations for medical spas and aesthetic treatments contains a broader systemic problem. Although the MSO model serves to support physicians, the desire for financial benefit may pressure and invert clinical control of medical care. As for the rest of the medical spa industry, the risk of unlicensed patient care remains. To be proactive is to act in the care of meaningful healthcare reform, not only as a response to a life lost.

---

[1] Jennifer Russano Koltse, Health Care Regulatory Primer: Management Service Organizations, Chapman & Cutler LLP (Oct. 12, 2017), https://www.chapman.com/media/publication/802_Chapman_Management_Service_Organizations_101217.pdf.

[2] H.B. 3749, 89th Leg., Reg. Sess. (Tex. 2025). 

[3] Peter A. Stokes, Corporate Practice of Medicine Evasion by Private Equity Firms, Seton Hall Univ. Sch. of Law Student Works (2025), https://scholarship.shu.edu/cgi/viewcontent.cgi?article=2667&context=student_scholarship.

[4] Dent v. West Virginia, 129 U.S. 114 (1889).

[5] I.R.S., Exempt Organizations Continuing Professional Education Technical Instruction Program for FY2000: Health Care Provider Reference Guide (2000), https://www.irs.gov/pub/irs-tege/eotopicf00.pdf.

[6] Tex. Med. Ass'n, Corporate Practice of Medicine White Paper (2023), https://www.texmed.org/CPMwhitepaper/.

[7] Med. Grp. Mgmt. Ass'n, Understanding Management Services Organizations (MSOs): Benefits, Compliance Risks, and Best Practices, MGMA (2024), https://www.mgma.com/articles/understanding-management-services-organizations-msos-benefits-compliance-risks-and-best-practices.

[8] McKesson Med.-Surgical Inc. v. Cleveland, No. 05-25-01310-CV (Tex. App.-Dallas Nov. 18, 2025, no pet.) (mem. op.).

[9] Eric J. Knickrehm, Banee Pachuca & Ryan Greenberg, Texas Bill Introduced to Restrict Non-Physician Practice in Certain Medical Spas, Winston & Strawn LLP (Apr. 8, 2025), https://www.winston.com/en/insights-news/texas-bill-introduced-to-restrict-non-physician-practice-in-certain-medical-spas

[10] Am. Med Spa Ass'n, The Texas Med Spa IV Therapy Death: What You Need to Know, AmSpa Blog (Oct. 19, 2023, updated Dec. 21, 2023), https://americanmedspa.org/blog/the-texas-med-spa-iv-therapy-death-what-you-need-to-know.

[11] Tex. Occ. Code § 157.001 (West 2025).

[12] See [8]. 

[13] What Are the Texas Medical Board’s Requirements for a Physician Who Delegates to an APRN or PA?, Texas Medical Board, https://www.tmb.state.tx.us/268-what-are-texas-medical-boards-requirements-physician-who-delegates-aprn-or-pa.

[14] Hayden Rooke-Ley et al., The Corporate Backdoor to Medicine: How MSOs Are Reshaping Physician Practices, MILBANK MEMORIAL FUND (Apr. 28, 2025), https://www.milbank.org/publications/the-corporate-backdoor-to-medicine-how-msos-are-reshaping-physician-practices/.

[15] See [2]

[16] Am. Med Spa Ass'n, Texas IV Therapy Bill HB 3749 Signed into Law by Governor Abbott, AmSpa News (Sept. 2025), https://americanmedspa.org/news/texas-iv-therapy-bill-hb-3749-signed-into-law-by-governor-abbott.

[17] New York Med Spa Compliance in 2026: Investigations Are Up, LENGEA (Jan. 12, 2026), https://lengealaw.com/new-york-med-spa-compliance-in-2026-investigations-are-up/.

[18] N.Y. Educ. Law § 6512(1) (McKinney 2025). 

[19] Christopher Seitz MD, Gics, GuardianMD (Jan. 6, 2026), https://guardianmedicaldirection.com/newsood Faith Exams and Telemedicine Clearance Exams: 2026 Complete Guide for Med Spas, IV Therapy and Wellness Clin/good-faith-exams-telemedicine-clearance/.

[20] H.B. 3749, 89th Leg., R.S. (Tex. 2025) (engrossed version), https://capitol.texas.gov/tlodocs/89R/billtext/html/HB03749H.htm.