Friendly PC and MSO Structures for Telehealth: How a Non-Doctor Owns a Telehealth Brand

Status checked October 18, 2026. This guide explains the landscape; it isn't legal advice. Structures like these need a healthcare attorney licensed in the states you serve.

What the corporate practice of medicine is

CPOM is a state-law doctrine, built from statutes, court cases, attorney general opinions and medical board policy, that stops lay people and ordinary business corporations from practicing medicine, employing physicians to practice medicine, or controlling physicians' clinical judgment (Epstein Becker Green). It varies widely: some states enforce it strictly, some have exceptions, and some have no doctrine at all.

Telehealth doesn't get you around it. The rules that generally apply are those of the state where the patient is located, so a brand that serves all 50 states has to meet the strictest of them (Epstein Becker Green).

California is the classic strict state. Its law says corporations have no professional rights or privileges (Bus. & Prof. Code §2400), and its courts have long held that a corporation can't practice medicine by employing doctors. The Medical Board of California has warned that a physician who serves as medical director for a lay-owned business can be found to be aiding and abetting unlicensed practice (Medical Board of California).

The two ways telehealth brands handle it

Option 1: use a clinician network's medical group

Most new brands start here. The clinician network supplies licensed doctors and nurse practitioners through its own affiliated professional entity, and the brand contracts with it as a non-clinical business. Several networks say so in their own materials, checked October 2026:

For a side-by-side of these and other partners, see OpenLoop alternatives: telehealth infrastructure partners compared.

This is the fastest route. The trade-off is that the clinical relationship sits with the network. If you switch networks later, patients have to move to a new medical group.

Option 2: your own MSO and friendly PC

Brands that want to own the clinical relationship, or keep the freedom to change vendors, build their own:

• The PC (professional corporation) is owned by a licensed physician. It employs or contracts with the clinicians and owns the clinical side: the patient relationship, prescribing, medical records and clinical policy.
• The MSO (management services organization) is usually the brand company. It provides everything non-clinical: technology, marketing, billing support, staff and administration.
• A management services agreement sets the MSO's fee. It should be fair market value for the services, shouldn't vary with the volume or value of referrals, and the method should be documented. A fee set as a percentage of professional revenue is the classic fee-splitting risk (MedCity News).
• A transfer restriction agreement (also called a succession or continuity agreement) limits the physician owner's ability to sell the PC's shares, and lets the MSO require a transfer to a qualified replacement doctor after events like death, disability or loss of license. It's the part that draws the most regulatory scrutiny.

The risks to design around

The last row matters for DTC brands whichever structure you use. Pay clinicians for their time and work, never per prescription, and make sure they can and do say no.

What changed in 2025 and 2026

Indiana, Maine, Illinois, Connecticut and Rhode Island also added deal-notice or ownership-reporting rules, and a federal "Stop Corporate Takeovers of Physicians Act" was introduced in September 2026 (Foley). Most of these laws aim at private equity and large deals rather than small DTC brands, but the direction is clear: regulators are looking at who really controls the practice.

Which states are strict

There's no free, authoritative 50-state table. The reference survey, from the American Health Lawyers Association, is paywalled. Three recent compliance guides (Cuvo, Sept. 2026, MedPath, June 2026, Permit Health, Dec. 2025) broadly agree on these groups:

Use it as a map, not a legal opinion. A "no doctrine" state can still have fee-splitting, clinic licensing or advertising rules, and states with a doctrine often have exceptions.

The prescribing rules that come with the structure

Licensure follows the patient. Clinicians generally need a license, or a recognized exception, in the state where the patient is at the time of the visit (CCHP). The Interstate Medical Licensure Compact speeds this up for physicians in 44 states plus D.C. and Guam, but it doesn't create a multistate license: each state's license is still issued and paid for separately (IMLCC).

A questionnaire alone often isn't enough. Many states explicitly say a static online questionnaire can't establish the relationship needed to prescribe, including Colorado, Delaware, Idaho, Iowa, Maryland, New Jersey, Virginia and Wisconsin. Maryland requires a live audio-video evaluation before treating, with exceptions, and Rhode Island doesn't accept async-only evaluations (CCHP). Iowa distinguishes an adaptive, interactive online interview, which can be acceptable, from a static form. That's why serious DTC intakes use branching questionnaires plus real clinician messaging or video where required.

Controlled substances: the deadline at the end of 2026

The Ryan Haight Act (21 U.S.C. 829(e)) requires at least one in-person evaluation before a controlled substance is prescribed over the internet. Since 2020 the DEA has waived that through temporary extensions. The current one, the fourth, runs through December 31, 2026 (Federal Register). A permanent "special registration" rule was proposed in January 2025, and trade press reported a final version under White House review in fall 2026 (telehealth.org). As of October 18, 2026, no further extension had been announced.

This matters if your brand offers testosterone (Schedule III), phentermine (Schedule IV), ADHD stimulants (Schedule II) or ketamine (Schedule III). If neither a final rule nor another extension arrives, the in-person requirement returns on January 1, 2027 for most new patients. GLP-1s such as semaglutide and tirzepatide are not controlled substances. Some states are stricter than the DEA anyway; Alabama and Louisiana, for example, generally require an in-person visit within the past year for controlled substances by telehealth (CCHP).

Choosing a structure for your brand

• Launching your first brand? A clinician network's medical group is usually the right start: faster, cheaper, and the network carries the licensing work. Put in writing who the medical entity is, who owns patient records, and how patients transfer if you leave.
• Scaling, raising money or planning to switch vendors? Your own MSO and friendly PC gives you control of the clinical relationship, at the cost of legal setup in every strict state you serve and the 2025–2026 control rules above.
• Either way: the brand's marketing, clinician pay and protocols have to stay clear of the de facto control, fee-splitting and OIG red flags. LegitScript also checks your partners and clinical process when you apply (our LegitScript guide).

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