This is not legal advice. Foundry PC is not a law firm.

If you operate in 30 states, three of them account for most of your regulatory risk. Here they are.

Texas

The rule. Texas has one of the most actively enforced CPOM doctrines in the country, rooted in the Medical Practice Act and enforced by the Texas Medical Board. Non-physicians cannot own a medical practice or employ physicians to practice medicine, with narrow statutory exceptions (certain hospitals, nonprofit health corporations, and specific rural arrangements).

What's changed. Texas hasn't passed an Oregon-style statute, but enforcement has hardened. The Board has pursued arrangements where the MSO's control was evident from operations. Legislative proposals to restrict private equity involvement have circulated. Texas also has specific rules about physician supervision of NPs and PAs (delegation and prescriptive authority agreements) that create separate compliance obligations.

What your structure needs. A Texas professional association (PA) or PLLC owned by a Texas-licensed physician. An MSA that clearly reserves clinical decisions to the PA. Careful management fee structuring; percentage fees are workable in Texas with the right analysis but draw scrutiny. Prescriptive authority agreements for NPs. No MSO employment of physicians. Texas also regulates the corporate name and "doing business as" usage for medical entities.

California

The rule. California prohibits lay ownership of medical practices and lay employment of physicians under the Medical Practice Act, enforced historically by the Medical Board. Professional corporations must be owned by licensed physicians, with limited allowances for certain other licensed professionals as minority shareholders.

What's changed. January 1, 2026 brought SB 351, which codifies CPOM restrictions against private equity and hedge fund involvement and gives the Attorney General direct enforcement authority, and AB 1415, which extends the state's pre-transaction notice regime (through the Office of Health Care Affordability) to MSOs and certain investors. The AG has argued in a 2026 amicus brief that MSO rights to replace the physician owner at will, and MSO control over coding, payer contracting, clinical hiring, and equipment, are hallmarks of prohibited control.

What your structure needs. A California professional medical corporation (domestic; no foreign qualification). A stock transfer restriction agreement with defined transfer events only. An MSA that puts coding, payer contracting, clinical staffing, and clinical equipment decisions in the PC's hands. A transaction-notice analysis for financings and acquisitions. Percentage-based management fees require particular care here.

New York

The rule. New York prohibits non-physician ownership of medical practices and requires medical PCs and PLLCs to be owned by New York-licensed physicians. Formation requires a NYSED certificate of authority before Department of State filing. New York also has strong fee-splitting prohibitions that affect management fee design.

What's changed. NYSED processing times have stretched to several months. S8442, pending in the legislature, would require physician majorities in voting shares, board seats, and officer roles. New York courts and the Office of Professional Medical Conduct have historically been aggressive about arrangements that look like fee-splitting or lay control.

What your structure needs. A domestic New York PC or PLLC with a New York-licensed physician owner. Physician-majority governance, built now so S8442 doesn't require a rebuild. A management fee that counsel has analyzed under New York's fee-splitting rules (flat or cost-plus is the safer default). Ownership-change notices to NYSED within 30 days. A realistic multi-month timeline, with a bridge arrangement if you need to be live sooner.

The common thread

All three states are moving the same direction: from "what do the documents say" to "who actually runs the practice." A structure that would have passed in 2018 in any of them is now a structure that needs its operations, not just its contracts, to reflect physician control.

How Foundry PC handles these states

Foundry prices Texas, California, and New York as separate domestic entities with state-specific document suites, and our independent counsel reviews each against the current rules before drafting. Physician owners we match hold licenses in all three when they're on your list.

Book a 20-minute call if any of these three is on your expansion map.