Urgent Care Centers: The Opportunities (and Challenges) of Ownership

Do you find the prospect of urgent care ownership appealing? Read on to learn about the requirements for launching a new facility.

Outdoor urgent care sign.

The urgent care industry is growing rapidly, making it a prime time to open and operate an independent urgent care center. These facilities have multiplied over the last several years, even before the COVID-19 pandemic. Not surprisingly, the pandemic has accelerated this growth.

A study found that patients are more likely to visit an urgent care center than ever. Between 2008 and 2016, patient visits to primary care providers declined by 24.2%. In that same period, visits to alternative venues such as urgent care centers increased 46.9%. In short, there’s a demand for urgent care throughout the 50 states, especially in areas where primary care practitioners are scarce.

Who Can Own an Urgent Care Center?

The rules for urgent care practice ownership are nuanced and complex and depend directly on the state in which the urgent care operates. In states with strong corporate practice of medicine (“CPOM”) doctrines, such as Illinois, New York, Texas, and California, only a physician or a professional corporation (PC) or professional limited liability company(PLLC) may own and operate an urgent care facility. 

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Workarounds exist in some circumstances to allow a non-licensed individual to operate an urgent care facility. But as a general rule, CPOM restrictions prohibit those who are not health care practitioners or who are not operating under a PC or PLLC from directly owning or operating an urgent care facility. Along similar lines, many states do not allow health care practitioners and non-licensed individuals to split fees for providing health care services. ( see https://jacksonllp.com/msa-management-services-agreements-in-healthcare/.)

In states where no or very relaxed CPOM laws exist, it may be possible for a non-licensed individual to own and operate an urgent care facility. 

Licensing and Urgent Care Centers

Regulation differs — often dramatically — by state. However, most U.S. states do not require licensing of urgent care centers as separate, distinct, and defined entities.

Instead, the majority of states permit urgent care centers to operate under an individual physician’s license. Hospital-affiliated centers can often operate under that hospital’s license. Alternatively, many states allow urgent care centers to operate under the umbrella of a professional corporation (PC) or a professional limited liability company (PLLC) owned entirely by licensed physicians.

When urgent care centers need not be licensed by a state’s department of health, they may escape significant regulatory oversight. Thus, physicians can open and operate these clinics on their own terms. This is not to say that standards of care related to patient needs are negotiable; instead, it allows urgent care centers to dictate what types of services to offer and the scope of such services.

Certificate Of Need Oversight

Where states do license urgent care centers, certificate of need (CON) laws often control the scope and type of services. CON laws also dictate the types of insurance and payment plans that facilities must accept. CONs are currently in place in 35 U.S. states and the District of Columbia.

State-implemented CONs aim to control healthcare costs by preventing duplicative services or unneeded expansions in a given geographic area. Legislators theorize that duplicative healthcare services or facilities cause a rise in healthcare costs to compensate for unused services and facilities.

CONs also seek to widen access to health care. Thus, many CONs require that health care facilities provide avenues for care to low-income or historically underserved populations. Such requirements include discounted care, financial aid policies, and mandatory acceptance of Medicaid and Medicare plans.

In states where CONs do not exist, urgent care centers do not need to meet these requirements. Therefore, owners in states without CONs typically may choose which insurance plans to accept and whether to accept federal payor plans or payment plans for self-pay patients.

Thus, before opening a new urgent care center, a practitioner should evaluate whether their state has a CON in place. If so, consider the operational and geographical limitations that the CON imposes.  

Scope of Urgent Care Services

Owners of urgent care facilities may generally exercise significant discretion in the types of services they offer. The scope of services provided by urgent care clinics often varies by facility. In other words, state regulations determine the full range of permissible clinical and diagnostic services. However, each urgent care facility may further limit the services it chooses to provide based on its own preferences, assessments of what makes financial sense, and the credentials of employees who staff the urgent care.

A caveat: to offer certain diagnostic tests, a facility must obtain the necessary licensing. For example, an urgent care facility must acquire a CLIA certificate to provide point-of-care laboratory testing.

Finally, the Emergency Treatment and Labor Act (EMTALA) requires the stabilization and treatment of anyone presenting at an emergency department (ED) no matter their insurance carrier, status, or ability to pay. However, EMTALA does not apply to any urgent care center not owned by a hospital. In this way, urgent care facilities have greater flexibility than emergency departments to determine whom they treat.

Staffing Urgent Care Centers

Urgent care owners can staff the center to their operational needs. For instance, some urgent care centers hire board-certified emergency physicians and offer similar services to an ED. Others employ primary care doctors, physician assistants, or advanced practice nurse practitioners. An urgent care owner must ensure that the facility’s personnel meets their state’s minimum staff licensure requirements. Beyond that, however, they have a fair amount of discretion in staffing.

Insurance

Before opening an urgent care facility — even where no state-implemented CON exists — practitioners should evaluate whether the market area is already saturated. Where this is the case, insurance networks may refuse to offer or enter into contracts with new urgent care facilities. This is the private-payor market’s answer to eliminating duplicative services that might result in unused services or facilities.

Conclusion

The need for urgent care services is evident. Even while urgent care facilities have multiplied, many states have not increased regulatory oversight. As a result, much flexibility remains in structuring the scope, hours, staffing, and facilities.

Opportunities to establish urgent care centers are — for the most part — ample, especially in states where facilities may be established under an individual physician’s license rather than under a separate, more strictly-regulated, urgent or immediate care facility license.

Your healthcare attorney can help you understand and comply with your state’s requirements. If you’re planning to open a new urgent care center in one of the states where we operate, reach out to us. Jackson LLP offers free consultations so that you can determine if our law firm is a good fit for your needs, so book a slot today.

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 and should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

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