This is not legal advice. Foundry PC is not a law firm.
A large share of the companies we work with aren't medical practices in the traditional sense. They're therapy groups, psychiatry and medication management platforms, ABA providers, speech and occupational therapy companies. The question we get is: does corporate practice of medicine even apply to us?
The answer is: often something like it does, but the rules are profession-specific and vary more than they do for physicians.
Corporate practice applies to more than medicine
The doctrine most people know is corporate practice of medicine. But many states apply parallel restrictions to psychology, licensed counseling and social work, nursing, physical and occupational therapy, and other licensed professions. The mechanism is usually the state's professional entity statute: a professional corporation or PLLC providing licensed services must be owned by professionals licensed in that field (or, in some states, in a related field).
So a non-licensed founder of a therapy company faces the same structural question a non-physician founder of a medical company faces: who can own the entity that employs the clinicians?
It depends on the profession
Psychiatry and medication management. These are medicine. Full CPOM rules apply. You need a physician-owned PC in CPOM states, plus collaborating physician arrangements for psychiatric NPs in states that require them. Psychiatry PC owners tend to command stipend premiums because of controlled substance prescribing.
Psychology. Many states require psychology practices to be owned by licensed psychologists. Some allow mixed ownership across mental health professions. A few allow lay ownership.
Counseling and social work (LPC, LCSW, LMFT). Highly variable. Some states have no ownership restriction and allow a standard LLC to employ therapists. Others require a professional entity owned by licensees. Several allow a professional entity owned by any licensed mental health professional, which gives you flexibility in picking an owner.
ABA. Behavior analysts (BCBAs) are licensed in most states now, and some states' professional entity rules extend to them. Many ABA companies operate as standard LLCs without issue; others, especially in states with newer BCBA licensure statutes, need a professional entity. Payer credentialing sometimes drives the structure more than the law does.
Speech, occupational, and physical therapy. Similar to counseling: state-by-state. Several states require professional entities for PT specifically. Multi-state pediatric therapy companies often end up with a hybrid: a standard LLC in permissive states and a professional entity in restrictive ones.
Three questions that determine your structure
- Do you have prescribers? If yes, you're in CPOM territory for at least that part of the practice, and you need a physician-owned medical PC (or a physician-owned entity employing the prescribers) in CPOM states.
- Which states are you in? Build a matrix: for each state and each profession you employ, can a non-licensee own the entity? Can a licensee in a different mental health profession own it?
- Are you billing insurance? Payers credential the entity. Some Medicaid programs and commercial payers have their own entity-type expectations independent of the law.
The common configurations
- Therapy-only, permissive states: standard LLC owned by the founders, employing licensed therapists. No MSO needed.
- Therapy-only, mixed states: standard LLC in permissive states, professional entity owned by a licensed clinician (often a co-founder or a friendly LCSW/psychologist) in restrictive states, with an MSA between the LLC and the professional entity.
- Therapy plus psychiatry: an MSO, a therapy professional entity where required, and a separate physician-owned medical PC for the prescribers. Two PCs, one MSO.
- ABA: usually a standard LLC; professional entity in specific states; watch payer requirements.
PLLC vs. PC
The entity type matters and varies by state. Some states only allow professional corporations for certain professions; others allow PLLCs. Some states restrict which professions can share an entity. The mismatch between a template built around "PC" and a state that expects "PLLC" for therapists is a recurring problem in multi-state builds. Have counsel check entity type per state per profession before filing.
How Foundry PC handles behavioral health
A substantial share of Foundry's clients are therapy, psychiatry, and ABA companies, and our templates include therapy-specific independent contractor and employment agreements, dual-PC structures for therapy plus prescribing, and profession-by-state entity eligibility reviews. Our physician network includes psychiatrists for PC ownership and collaborating roles.
Book a 20-minute call with your state list and your clinician types. We'll tell you whether you need an MSO-PC at all, and where.