Summary. Building a management services organization means constructing a two-entity structure that lets non-physician capital own the economics of a medical practice without owning the practice itself. The design problem is that the same features making the structure investable — long-term contracts, control over the professional entity's ownership, and a fee capturing most of the margin — are the ones that make it vulnerable to a corporate practice or fee-splitting challenge. Getting it right means researching the specific profession in the specific state, drafting the management agreement to leave clinical authority where it belongs, supporting the fee with a valuation, and then operating consistently with the documents rather than as a single business. This guide walks the structuring decisions in sequence, the documents and what each must contain, the regulatory filings and approvals required, and the operating discipline that keeps the structure defensible.

An investor wants to own a medical practice. In most states that is not possible, because the corporate practice of medicine doctrine prohibits a business corporation from employing physicians or controlling the practice of medicine.

The industry's answer is a two-entity structure. A professional entity owned by a licensed physician holds the clinical business, employs the clinicians, and holds the licenses. A management services organization owned by the investor provides everything else under a long-term contract, for a fee that captures most of the margin.

That structure works, it is ubiquitous, and it is defensible when built and operated properly. This guide is about building one.

Step one: research before you draft

Identify the specific profession and the specific states. The corporate practice doctrine differs by state and — within a state — by profession. Medicine, dentistry, optometry, veterinary medicine, chiropractic, physical therapy, behavioral health, and nursing each have their own practice act, professional entity statute, board rules, and fee-splitting prohibition. A state that enforces corporate practice strictly for medicine may permit dental support organizations to operate freely, or the reverse.

Produce a written memorandum for each state covering:

  • Whether a corporate practice prohibition exists, and its source — practice act, professional corporation statute, board rule, attorney general opinion, or case law.
  • Who may own the professional entity. Most states require licensure in the state; some permit ownership by a licensee of another state; a few permit limited non-licensee ownership.
  • The fee-splitting rule, and specifically whether a percentage-of-revenue management fee is permitted, prohibited, or unaddressed.
  • Whether stock transfer restriction agreements are permitted, restricted, or have been the subject of enforcement.
  • Whether the state has a healthcare transaction notice or review statute, and its thresholds and timelines.
  • Any state-specific management company registration requirement.
  • Telehealth rules if care will cross state lines.

Do not build from a form. Multistate operations frequently require different structures in different states, which is expensive and is the correct answer.

Step two: design the entities

The professional entity

Form. A professional corporation, professional association, or professional limited liability company, per the state's professional entity statute. Confirm the permitted form for the profession — several states restrict PLLCs for medicine.

Ownership. One or more physicians licensed in the state. The choice of who holds the shares — the "friendly PC" or "captive PC" physician — is a structural decision, not an administrative one.

Choose that physician carefully. Someone actually involved in the practice, licensed in the state, with a real role, and ideally with some economic interest in the platform. A nominee who lives elsewhere, has no involvement, and holds the shares as an accommodation is the fact that makes a structure look like a sham. The regulator's question is whether a licensed professional actually controls the practice of medicine, and a nominee answers it badly.

Governance. The professional entity's board makes clinical decisions. It should meet, deliberate, and keep minutes that reflect real deliberation.

Multistate. Where the platform operates in several states, the options are a professional entity in each state owned by a locally licensed physician, or — where permitted — a single entity qualified in multiple states. The former is more common and more defensible; the latter is simpler and depends entirely on the states involved.

The MSO

An ordinary business entity — typically an LLC for tax flexibility, sometimes a corporation where the sponsor's structure requires it — owned by the investor and, usually, by rolling physicians.

The MSO holds the real estate leases, the equipment, the non-clinical workforce, the information systems, the payor contracting support, the billing operation, and the enterprise value.

It must not employ clinicians in a corporate practice state, and it must not hold the clinical licenses.

Step three: the documents

The Management Services Agreement

The central document. Long-term — twenty to forty years is typical — with limited termination rights, because the MSO's investment depends on the revenue stream continuing.

What it must contain:

  • A detailed schedule of services: facilities, equipment, non-clinical personnel, billing and collections, information technology, marketing, human resources, purchasing, compliance support, financial management, and administrative management.
  • The fee, and its basis.
  • An express reservation of clinical authority to the professional entity: diagnosis and treatment decisions, the physician-patient relationship, clinical protocols, medical record content and, where the state requires it, ownership, clinical staffing decisions, and the exercise of independent professional judgment.
  • A statement that nothing in the agreement is intended to permit the MSO to engage in the practice of medicine, with a severability and reformation provision.
  • Compliance with law covenants, including cooperation on regulatory matters.
  • Books and records provisions.
  • Termination and the consequences, including transition of the non-clinical infrastructure.

What it must not contain:

  • Approval rights over clinical staffing. A right to be consulted is defensible; a right to approve or veto the hiring or termination of a physician is dangerous.
  • Productivity requirements that effectively dictate patient volume or visit length.
  • Clinical protocols imposed by the MSO rather than adopted by clinicians.
  • Direction of coding and billing judgments, which are clinical.
  • Referral requirements within the network, which implicate corporate practice and the federal fraud and abuse statutes simultaneously.
  • A fee structure that leaves the professional entity with no margin at all, which evidences that the arrangement is not arm's-length.

The fee

The most scrutinized term.

The conservative structure is a flat fee or cost-plus fee, reset periodically to fair market value with documentation supporting the calculation. Percentage-of-revenue fees are common in practice, are prohibited outright in several states as fee splitting, and carry more risk where federal program business is involved.

Obtain an independent fair market value opinion at inception, and on a defined reset schedule. This is not a formality — fair market value and commercial reasonableness are the hinge on which the Anti-Kickback and Stark analyses turn, and an opinion obtained contemporaneously is worth far more than one reconstructed during an investigation.

Note the Anti-Kickback personal services and management contracts safe harbor at 42 C.F.R. § 1001.952(d), which requires a written agreement, specified services, and compensation set in advance at fair market value not determined in a manner taking into account the volume or value of referrals.

The Stock Transfer Restriction Agreement

The instrument that makes the structure investable, and the one under the most legislative attention.

The physician shareholder agrees to transfer the shares, for a nominal amount, to a successor designated by the MSO, on the occurrence of specified events — death, disability, loss of license, breach, or in many agreements simply on the MSO's demand.

How far to go is a genuine judgment. A succession agreement covering death, disability, and loss of license is broadly accepted. An agreement permitting the MSO to replace the owner at will, coupled with a nominee who has no other role, is the structure legislatures are now targeting. Draft to the state's tolerance and revisit it as the law moves.

The physician employment agreements

Between the professional entity and its clinicians. Compensation, benefits, clinical duties, restrictive covenants — noting that several states now restrict physician noncompetes specifically — malpractice coverage and tail responsibility, and termination.

The remaining documents

A lease or sublease and an equipment agreement, frequently rolled into the MSA. Assignment and security documents where a lender requires them. Governance documents for the MSO, including the rollover physicians' equity terms.

Step four: filings, approvals, and timing

These drive the closing date and are routinely identified too late.

State healthcare transaction notice and review. A rapidly expanding category. A growing number of states now require advance notice — commonly sixty to ninety days — of material healthcare transactions, with authority in the attorney general or a health oversight agency to review, extend the review period, impose conditions, and in some states disapprove. California's Office of Health Care Affordability, Massachusetts, Oregon, New York, Illinois, Minnesota, and others have adopted regimes differing in thresholds, covered parties, and remedies. Several specifically target private equity acquisitions of physician practices. Check this in week one; a ninety-day pre-closing notice is a schedule item, not a detail.

Hart-Scott-Rodino where the thresholds are met.

Certificate of need for certain facilities and services in the states that require it.

Licensure. Facility licenses, CLIA certificates, pharmacy permits, DEA registrations, radiological materials licenses, and clinic licenses. Several do not transfer and require new application with processing times measured in months. Inventory them and confirm transferability early, because a non-transferable license can determine deal structure.

Provider enrollment. A transaction may constitute a change of ownership for Medicare under 42 C.F.R. § 489.18, requiring notice and either assignment or rejection of the provider agreement. Assignment carries successor liability for the predecessor's overpayments and sanctions, which is a real reason to consider rejecting and enrolling anew — at the cost of a billing gap. Medicaid and commercial payors have their own processes and their own lead times.

Professional entity formation and qualification in each state, with the licensed owner in place.

Malpractice coverage, including a tail where the existing policy is claims-made — who buys it and at what cost is a standard negotiated term.

Step five: diligence

Beyond ordinary corporate diligence, a healthcare transaction requires:

  • A billing and coding audit on a statistically valid sample, reviewed by a certified coder. This is where undisclosed exposure lives, and an extrapolated overpayment can exceed the purchase price.
  • The sixty-day rule. Under 42 U.S.C. § 1320a-7k(d), an identified overpayment must be reported and returned within sixty days of identification, and retention beyond that is a False Claims Act violation. Diligence that identifies an overpayment starts a clock, and who reports it, when, and at whose cost must be addressed in the agreement rather than discovered after closing.
  • Existing arrangements with referral sources: medical directorships, leases, call coverage, and joint ventures, each requiring a Stark exception and an Anti-Kickback analysis with fair market value support.
  • Exclusion screening of all providers and employees against the OIG List of Excluded Individuals and Entities and the SAM exclusions list — at hire and monthly thereafter.
  • Compliance program review, and any history of self-disclosures, corporate integrity agreements, payor audits, or government inquiries.
  • Payor contracts, including assignment and change-of-control provisions and rate schedules.
  • Local market share, because physician practice roll-ups have drawn antitrust attention and the agencies have addressed serial acquisitions in local markets.

Step six: operating the structure

This is where structures fail. A properly papered arrangement operated as a single business is the fact pattern that produces adverse findings.

Keep the entities genuinely separate.

  • Separate bank accounts, separate books, separate tax returns.
  • Intercompany transactions actually settled — the management fee paid, not accrued indefinitely.
  • Separate payroll. Clinicians on the professional entity's payroll; administrative staff on the MSO's.
  • Separate signatures. The professional entity's officers sign its documents.

Maintain professional entity governance. Board or member meetings with minutes reflecting real deliberation on clinical policy, quality, and staffing.

Let clinicians make clinical decisions, visibly. Clinical protocols adopted by a clinical committee, credentialing decided by clinicians, and quality review conducted by peers.

Watch the language. Internal communications, board decks, and marketing materials describing the MSO as "our practices," "our physicians," or "our patients" are exhibits. Train the team; this is the easiest thing to fix and the most commonly ignored.

Reset the fee on schedule, with fresh valuation support.

Document the compliance program: a compliance officer, a code of conduct, training, a hotline, auditing and monitoring, and a process for investigating and correcting. The OIG's compliance program guidance describes the elements, and their presence affects both charging discretion and the Sentencing Guidelines calculation.

Revisit annually. State law in this area is moving quickly — transaction review statutes, legislation targeting the friendly PC structure directly, and physician noncompete restrictions are all expanding. A structure compliant when built may not remain so.

Primary authority

  • State medical practice acts, professional corporation and professional LLC statutes, medical board regulations, and fee-splitting prohibitions — the operative law, differing by state and by profession, with no federal analogue.
  • 42 U.S.C. § 1320a-7b(b) — the Anti-Kickback Statute, including § 1320a-7b(h) (no specific intent required) and § 1320a-7b(g) (a resulting claim is a false claim); 42 C.F.R. § 1001.952, in particular (b) and (c) (space and equipment rental), (d) (personal services and management contracts), and (ee)–(gg) (value-based arrangements).
  • 42 U.S.C. § 1395nn — the Stark Law; 42 C.F.R. §§ 411.351–411.357, including § 411.352 (group practice), § 411.357(l) (fair market value compensation), and the 2020 definitions of fair market value, commercial reasonableness, and the volume or value standard.
  • 31 U.S.C. §§ 3729–3733 — the False Claims Act; 42 U.S.C. § 1320a-7k(d) — the sixty-day overpayment rule; 42 U.S.C. § 1320a-7 — exclusion; 42 U.S.C. § 1320a-7a — civil monetary penalties.
  • 42 C.F.R. § 489.18 — change of ownership and the Medicare provider agreement; 42 C.F.R. Part 424, Subpart P — provider enrollment.
  • 45 C.F.R. Parts 160 and 164 — HIPAA, including the business associate relationship between the professional entity and the MSO.
  • 15 U.S.C. § 18 and § 18a — Clayton Act § 7 and Hart-Scott-Rodino.
  • State healthcare transaction notice and review statutes — California's Office of Health Care Affordability provisions and the analogous regimes in Massachusetts, Oregon, New York, Illinois, Minnesota, and a growing list of states.
  • OIG Advisory Opinions, Special Fraud Alerts, and compliance program guidance — the most useful practical guidance on specific arrangements.
  • United States v. Greber, 760 F.2d 68 (3d Cir. 1985) — the one purpose test; Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) — implied certification and materiality.

A worked build: the three-state ophthalmology platform

A sponsor acquires an eight-location ophthalmology group operating in three states, with an ambulatory surgery center and an optical retail business.

Week one: the state analysis. Three memoranda.

State A enforces corporate practice strictly and prohibits percentage-of-revenue management fees. Structure: a professional corporation owned by the group's managing physician, subject to a succession agreement, with a flat management fee reset annually on an independent valuation.

State B has a corporate practice doctrine with a broad exception for entities employing physicians under a managed care arrangement, which does not apply here. Same structure as State A, with percentage fees permitted.

State C has no meaningful corporate practice prohibition for medicine. The MSO can employ physicians directly — simpler, cheaper, and a useful reminder that the complexity elsewhere is a legal artifact.

The optical business is separately analyzed: optometry is regulated distinctly, and several states restrict the relationship between optical retailers and optometrists. A separate structure is required.

The surgery center has its own facility license, its own Medicare enrollment, and — in one state — a certificate of need. It is held in a separate entity with physician ownership addressed under the ASC safe harbor at 42 C.F.R. § 1001.952(r), which has specific requirements the existing ownership does not fully satisfy. Restructuring the ASC ownership is a workstream of its own.

Week two: the timing constraints surface. State A has a healthcare transaction notice statute with a ninety-day pre-closing period; the threshold is met. Two facility licenses are non-transferable and require new applications with sixty-day processing. Together these move the closing by four months, and the fact that they were identified in week two rather than week ten is the difference between a delayed closing and a broken one.

Weeks three to eight: diligence. The billing audit samples 250 encounters and finds a pattern of cataract procedures billed with a modifier the documentation does not support, extrapolating to a mid-six-figure overpayment. The sixty-day clock starts on identification, and the parties negotiate: the seller retains the obligation, funds an escrow, engages counsel for a self-disclosure, and indemnifies without cap. Representation and warranty insurance excludes it.

Two medical directorships with a referring hospital lack fair market value support; both are terminated and re-papered at closing.

Weeks six to twelve: documents. Three professional entities formed, three MSAs drafted to state-specific requirements, succession agreements, physician employment agreements with rollover, and — because the platform intends to add telehealth — a fourth professional entity structure designed for multistate licensure.

At closing and after. Separate accounts, separate payroll, quarterly professional entity board meetings with minutes, an annual fee valuation reset, and a compliance program with a named officer. And a calendar entry to revisit the whole structure in twelve months, because the law will have moved.

Tax structuring

The two-entity design creates tax questions that do not arise in an ordinary acquisition, and getting them wrong is expensive.

The MSO's form. Usually an LLC taxed as a partnership, which permits flexible allocations, a § 754 election to step up inside basis on purchases of interests, and rollover participation without a corporate layer. Where the sponsor's fund structure or an anticipated exit favors it, a C corporation may be used, at the cost of a second layer of tax on the eventual sale.

The professional entity's form. Frequently an S corporation, which raises a trap: § 1361 restricts eligible shareholders, and a transfer of the shares under the succession agreement to an ineligible holder — an entity, a nonresident alien, or an impermissible trust — terminates the S election retroactively. The succession mechanism must be drafted to transfer only to eligible individuals, and the trigger events must be reviewed with that constraint in mind.

Consolidation and separateness. For financial reporting, the MSO frequently consolidates the professional entity as a variable interest entity under ASC 810, because the MSA and the succession agreement give it a controlling financial interest. That accounting conclusion does not make them one taxpayer, and it does not affect the corporate practice analysis — but it is a fact a regulator may cite, so it should be understood and explained rather than discovered.

The management fee's deductibility. Ordinary and necessary business expense to the professional entity under § 162, income to the MSO. Where the fee is set above fair market value to strip earnings, the IRS may challenge the deduction — and the same facts support a fee-splitting or Anti-Kickback theory. The valuation serves both purposes.

Transfer pricing where the entities are commonly controlled, and § 482 authority to reallocate income between them.

Purchase price allocation. The MSO acquires non-clinical assets, workforce in place, and goodwill; the professional entity's clinical assets have a separate treatment. Personal goodwill attributable to individual physicians — as distinct from enterprise goodwill — may be purchased directly from them at capital gains rates, which is a meaningful benefit and requires that no enforceable noncompete assigned the goodwill to the entity beforehand.

Rollover equity should be structured for tax deferral, commonly through a contribution to the MSO LLC under § 721 — noting the investment company exception and the disguised sale rules under § 707.

State and local tax. Multistate operations, apportionment of the management fee, and gross receipts taxes in states that impose them on service revenue.

The friendly PC physician

The person who holds the shares is the structure's weakest point and receives the least attention.

Who should it be. A licensed physician in the state, actually practicing, with a genuine role in the organization — a regional medical director, the group's founding physician, or a senior clinician the other physicians respect. Ideally with an economic interest in the MSO, so their incentives align without their independence being purchased.

Who it should not be. A physician in another state with no involvement. A retired physician. The sponsor's medical adviser who has never seen the clinic. A person whose only function is to hold the shares.

What they should understand. That they own the professional entity, that they bear fiduciary and professional responsibility for it, that they will sign its filings and its payor enrollments, and that they may be named in litigation and in board complaints arising from its operations. This is not nominal, and a physician who signed the succession agreement without understanding it is a witness for the other side.

Their own counsel. The friendly PC physician has interests distinct from the MSO's, and the MSO's counsel cannot represent both. Where the physician is unrepresented, the arrangement is more vulnerable — and where the physician later disputes it, the absence of independent advice is the first fact in the complaint.

Indemnification and insurance. The MSA should indemnify the physician for liabilities arising from the professional entity's operations other than their own clinical acts, and the entity must carry malpractice coverage and, where appropriate, directors and officers coverage.

Succession planning. What happens on death, disability, retirement, loss of license, or departure? The agreement addresses it; the practical execution requires an identified successor who is licensed, willing, and already known to the organization. Platforms that have not identified a successor discover the problem at the worst moment.

Compensation. The physician should be paid for the role — modestly, but genuinely — and the arrangement should be documented at fair market value like any other.

Regulatory direction. Legislative proposals in several states would restrict succession agreements, require the professional entity's owner to have a genuine practice in the state, or limit the MSO's control over the ownership. A structure built around a nominee is the one those provisions are aimed at, and a structure built around a real practicing physician with a real role survives them.

Fixing an existing structure

Most engagements are not greenfield builds. They are a platform assembled over several years by several firms, discovered during diligence for the next transaction, and needing repair under time pressure.

Diagnose first. Pull every MSA, succession agreement, employment agreement, and lease across the platform, and map them against the state analysis. The typical findings: percentage fees in a state that prohibits them; MSAs granting the MSO approval rights over clinical staffing; succession agreements with a nominee in another state; entities formed but never properly qualified; no fee valuation ever obtained; and several practices operating on the acquired group's original documents because nobody conformed them after closing.

Triage by exposure, not by tidiness. The provisions that matter most: clinical control language, the fee structure in prohibited-percentage states, the identity of the friendly PC owner, and the absence of valuation support. A missing recital is not worth the same attention.

Fix the operating practice first, because it is fast and free. Separate the bank accounts. Start holding professional entity board meetings and keeping minutes. Move clinicians onto the correct payroll. Stop describing the practices as the MSO's in internal materials. These changes take weeks and materially improve the picture a regulator or a buyer sees.

Then amend the documents. Conform the MSAs to a compliant template, obtain a valuation and reset the fees, replace or re-paper the succession agreements, and where a nominee physician has no real role, replace them with someone who does.

Consider whether to self-correct. Where the arrangement implicates the federal statutes — a fee that cannot be supported at fair market value, a medical directorship without an exception, an arrangement conditioning referrals — the OIG Self-Disclosure Protocol and the CMS Stark self-referral disclosure protocol are available and produce materially better outcomes than discovery. Analyze the sixty-day overpayment rule at the same time, because identification starts a clock.

Sequence against the transaction. A buyer's counsel will find what you found. A platform that identifies its own problems, documents a remediation plan, and executes it presents very differently from one that is discovered — and the difference shows up in the purchase price, in the indemnity, and in whether representation and warranty insurance will cover healthcare regulatory matters at all.

Tell the client the honest timeline. Meaningful remediation across a multistate platform takes six to twelve months. Beginning it two weeks before a letter of intent is not remediation; it is documentation of the problem.

Beyond medicine: the same build elsewhere

The MSO model has been exported to every licensed profession that attracts outside capital, and the template does not transfer cleanly.

Dentistry. Dental support organizations are the most mature version, and several states regulate them specifically — addressing permissible DSO services, prohibited control over clinical judgment, and in some states registration. Several states enacted dental-specific legislation after enforcement actions involving clinical decisions driven by production targets, and those statutes are the model other professions' legislatures are examining.

Veterinary medicine. Most states restrict corporate ownership of veterinary practices, and consolidation has proceeded through structures closely tracking the medical model. Practice acts vary widely and several states are notably permissive.

Optometry. Regulated separately and, in several states, restrictively — including longstanding rules governing the relationship between optical retailers and optometrists, which is an active enforcement area and which frequently requires a different structure from the one used for the ophthalmology practice next door.

Behavioral health. Frequently subject to corporate practice restrictions plus additional facility and program licensure. The telehealth overlay is unusually significant, and remote prescribing of controlled substances carries its own regime under the Ryan Haight Act at 21 U.S.C. § 829(e), whose telemedicine flexibilities have been extended repeatedly and remain subject to rulemaking.

Physical therapy, chiropractic, acupuncture, and nursing. Each with a separate practice act and a separate answer.

Pharmacy. Ownership restrictions in several states, plus DSCSA requirements and rapidly expanding state PBM regulation.

Law. The strictest of all. ABA Model Rule 5.4 prohibits nonlawyer ownership and fee sharing, and — with the narrow exceptions of Arizona's alternative business structures and Utah's regulatory sandbox — outside investment in law practices remains prohibited nationwide. MSO structures are used for law firm back-office services, with tighter constraints and far less tolerance for aggressive design.

The instruction is identical in every case: identify the practice act, the professional entity statute, the board rules, and the fee-splitting prohibition for the specific profession in the specific state, and build from that rather than from a form drafted for medicine. Counsel who adapt a physician MSA for a veterinary platform without doing the research produce a document that looks right and is not.

What the sponsor should understand

Investors approach this structure expecting it to behave like any other platform acquisition, and several features do not.

You will not own the practices. You own a contract with them and the right to designate who owns them. That is a genuine distinction and it constrains what you can do — you cannot direct clinical staffing, you cannot set patient volume targets that function as clinical direction, and you cannot describe the physicians as your employees.

The enterprise value sits in the MSO, and it depends on the MSA's enforceability and duration. A structure whose management agreement is voidable as against public policy in the governing state is a structure with no asset behind it, which is why the state analysis is a diligence item rather than a formality.

Regulatory change is a live risk to the model, not merely to compliance. Legislation restricting succession agreements, requiring genuine practice by the professional entity's owner, or limiting MSO control over clinical operations has been introduced in multiple states, and where enacted it may require restructuring rather than adjustment. Underwrite that risk explicitly.

State transaction review adds months, sometimes to every add-on. A platform acquiring practices across ten states should expect to be filing notices continuously, and the acquisition timeline should reflect it.

Physician retention is the investment thesis, and several states have restricted physician noncompetes specifically. Where the covenant is unenforceable, retention depends on compensation, culture, and rollover economics rather than on the contract.

The exit is the point, and diligence at exit will be thorough. The next buyer's counsel will read the MSAs, examine the fee valuations, ask who the friendly PC physician is and what they do, and review the billing. A platform that maintained the discipline described in this guide sells at a price reflecting its earnings; one that did not sells at a price reflecting its problems, or does not sell.

Budget for the compliance function. A compliance officer, a coding audit program, annual valuations, and healthcare regulatory counsel are ongoing costs, not transaction costs, and a platform that treats them as optional is deferring an expense rather than avoiding one.

And take the clinical autonomy commitments seriously as commitments, not as drafting. The structure exists because a legislature decided that clinical judgment should not answer to capital. Operating as though that concern is a technicality is what produces the enforcement actions and, eventually, the statutes that follow them.

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This guide is provided for general informational purposes and does not constitute legal advice. Corporate practice of medicine and fee-splitting rules are state law, differ substantially by state and by profession, and are enforced through medical board action, payor recoupment, private litigation, and diligence in later transactions. State healthcare transaction review requirements are expanding rapidly and several impose pre-closing notice periods measured in months. Consult qualified healthcare regulatory counsel in every state of operation before structuring or operating any arrangement described here.