We Have Different Healthcare Licenses. Can We Open a Practice Together?
States vary in their laws for multidisciplinary private practice. We explore three different approaches.
To offer the best care, you may need to collaborate with different kinds of providers. Hospitals and rehabilitation centers commonly adopt a multidisciplinary model. But how does it work in private practice? Healthcare professionals in the early stages of opening a practice often ask: “with whom can I own my practice?” or “must I own a practice with other members of the same profession?”
As with many aspects of healthcare compliance, state law dictates who can and cannot operate a practice together. You will typically find these restrictions in a state’s corporate laws and regulations, which dictate ownership requirements for corporate entities like a professional limited liability company (PLLC) or a professional corporation (PC). While some states allow so-called “related professions” to operate under the same entity, others are more restrictive.
Also, note that even if you opt to practice without a corporate entity, laws prohibiting fee-splitting between members of different professions (which also vary by state) likely prohibit you from operating a business that feels like co-ownership.
A State-by-State Look at Multidisciplinary Practice
To understand the variability in these laws, let’s look at how a handful of states address the issue of practice co-ownership.
Illinois
In Illinois, professionals licensed in medicine, podiatry, dentistry, and optometry may operate under the same PLLC. Those licensed in clinical psychology, social work, marriage and family counseling, and professional counseling may also open a practice together. Note that the law only allows services to be provided by professionals licensed in each field. For example, only a clinical psychologist can render clinical psychology services. Meanwhile, an LCSW, even if supervised by or collaborating with a clinical psychologist, cannot render clinical psychology services. As a state with a strong corporate practice of medicine doctrine, all owners of the business must be licensed in at least one of the services offered by the corporate entity.
California
California approaches multidisciplinary practices differently. Some view it as offering more flexibility for a practice’s structure. State law establishes various categories of professional corporations and outlines which professionals can practice together within that corporate structure.
For example, a podiatric medical corporation may include licensed:
- physicians and surgeons
- psychologists
- registered nurses
- optometrists
- chiropractors
- acupuncturists
- physical therapists
- naturopathic doctors
As in Illinois, individuals must be licensed to render professional services. Any of the licensed professionals listed under a designated category of professional corporation may serve as shareholders, officers, directors, or employees, of that category of professional corporation, provided that:
- The sum of the shares owned by the licensed professionals who are listed under the designated category of professional corporation does not exceed 49% of the corporation’s total shares, and
- The number of licensed professionals who are not licensed by the government agency regulating the designated corporation, but own shares in the designated corporation, does not exceed the number of licensed professionals who are licensed by the government agency regulating the designated corporation and own shares in the designated corporation.
Michigan
Generally, Michigan requires that PLLCs established to render healthcare services must be organized by members of the same professional licensure. However, the state’s public health code has carved out an exception for certain medical practices. Thus, Individuals who are licensed in chiropractic services, medicine, osteopathic medicine and surgery, and podiatric medicine and surgery, as defined in the public health code, may operate under the same PLLC.
Get Legal Support
As we’ve discussed, states vary significantly regarding how healthcare entities can be structured and the limitations that govern which services they can provide. The experienced attorneys at Jackson LLP can help you meet all of the requirements to launch or maintain a healthcare practice, including a properly formed PLLC, PC, or other entity types. If you operate in one of the states where we have licensed attorneys, learn more about us by scheduling a free consultation.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. This blog should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.