This is not legal advice. Foundry PC is not a law firm.
The physician who owns your professional corporation is doing real work: holding the license the entity depends on, signing off on clinical policies, supervising credentialing, and carrying professional accountability. They should be paid for it. The question is how.
The principle: flat, fair-market, and documented
The physician owner should receive a fixed stipend that reflects the time, responsibility, and risk of the role, set at fair market value, and documented in a written agreement that describes the duties.
That's it. Three elements. Every structure that gets MSOs into regulatory trouble violates at least one of them.
Why not revenue share
It's tempting. Revenue share aligns incentives, it scales with the business, and physicians sometimes ask for it. But tying the PC owner's compensation to the PC's revenue creates two problems.
First, it blurs the line the whole structure depends on. The physician owner is supposed to own the PC and control its clinical decisions independent of the MSO's financial interest. If their pay rises when the MSO's revenue rises, a regulator will ask whether the physician is really independent or just a well-compensated proxy.
Second, in many states, compensation that varies with the volume or value of referrals or services triggers fee-splitting, anti-kickback, or self-referral analysis. That's a different category of legal exposure, and it's one you don't need.
Flat stipend. Reviewed annually. Adjusted for scope, not for revenue.
What drives the number
In our experience matching physician owners for multi-state structures, the stipend is driven by:
- State count. More states means more licenses to maintain, more boards to answer to, and more entities to sign for. A single-state PC owner and a 45-state PC owner are not doing the same job.
- Specialty. Psychiatry, controlled-substance prescribing, and other higher-liability specialties command premiums because the physician's exposure is higher.
- Scope of duties. A PC owner who only holds the entity is different from one who also serves as medical director, reviews charts, or supervises NPs. Those are separate services and should be priced separately.
- Time commitment. Monthly meetings, policy reviews, credentialing sign-offs. Estimate hours and price accordingly.
As a general reference, we've seen flat monthly stipends in the range of roughly $1,250 for a small-footprint PC owner up to $2,750 or more for a 30 to 50-state footprint, with specialty premiums that can push a 50-state psychiatry PC owner well above that. Collaborating physician and medical director services for NP-led practices are typically priced per supervised provider on top.
Structures we see that raise flags
- Nominal stipend. A $200 per month payment for a 40-state PC owner is not fair market value. It signals the physician is a figurehead.
- Equity in the MSO plus PC ownership. If the physician owns part of the MSO and all of the PC, the "independent physician" argument gets thin. Some states prohibit the overlap outright (Oregon).
- Compensation tied to "productivity" of the PC. Revenue share with a different label.
- No written duties. If the agreement doesn't say what the physician does, you can't defend the stipend as fair market value for services rendered.
- Undocumented indemnification. The physician should be indemnified by the MSO for liabilities arising from the MSO's conduct, and that should be in writing. Without it, physicians push for higher pay to cover the risk, and the structure looks lopsided.
What a good physician owner agreement contains
- Description of duties and time expectations
- Flat monthly stipend with an annual review clause
- Term and termination, with defined transfer events (loss of license, death, disability, material breach) rather than "at MSO's discretion"
- Indemnification running from the MSO to the physician for non-clinical matters
- Professional liability coverage responsibility
- Confidentiality and non-solicit provisions appropriate to the role
- Clear statement that clinical decisions rest with the physician and the PC
How Foundry PC handles it
Foundry's physician owners are paid flat fair-market stipends, stepped by state count and adjusted for specialty. We use a standard physician owner services agreement with defined duties, defined transfer events, and MSO-to-physician indemnification, and independent counsel reviews it for each engagement. We never structure revenue share.
If a physician you're talking to is asking for a percentage, or a template you've been handed pays a token amount, book a 20-minute call. We'll show you what the market looks like.