Nevada Corporate Practice of Medicine: Compliance Guide for Digital Health

Nevada carries an outsized reputation as a permissive, founder-friendly state. Its lack of state income tax, flexible LLC formation rules, and general regulatory posture attract business formation from across the country. For healthcare founders, however, Nevada's reputation as an easy-going state can create dangerous blind spots. Nevada's corporate practice of medicine rules are stricter than many founders expect, actively enforced by the Nevada State Board of Medical Examiners, and apply with full force to the growing digital health and telehealth market in Las Vegas, Reno, and beyond. If you are entering Nevada, assume the rules are strict — because they are.

The Legal Basis: Professional Corporations Act and Medical Practice Act

Nevada does not have a standalone CPOM statute with that label, but the prohibition on corporate practice of medicine emerges clearly from two overlapping bodies of law. The Nevada Medical Practice Act (NRS Chapter 630) restricts the practice of medicine to individuals who hold a valid Nevada physician license. The Act's definition of the practice of medicine is broad, encompassing diagnosis, treatment, prescription, and the provision of medical advice with respect to physical or mental conditions.

Layered on top of the Medical Practice Act is the Nevada Professional Corporations Act (NRS Chapter 89). This statute requires that any professional corporation organized to provide medical services — or any of the other enumerated professional services — must have all of its shares held by individuals licensed to perform the services the corporation provides. A physician must own 100% of a Nevada medical professional corporation. There is no exception for passive investors, non-voting shares, or non-physician co-founders.

The Nevada Attorney General has issued opinions interpreting these statutes to support the CPOM prohibition. While AG opinions are not binding law, they carry substantial weight with the Nevada State Board of Medical Examiners and with courts interpreting Nevada's professional licensing framework. The AG's position is that non-physician entities cannot practice medicine, cannot employ physicians for the purpose of practicing medicine, and cannot exercise control over the clinical decisions of a licensed physician.

Nevada's business-friendly incorporation environment is real — for non-professional businesses. For healthcare companies providing medical services to Nevada patients, the Professional Corporations Act imposes physician-ownership requirements that apply regardless of where your entity is formed or how it is structured in other states.

The Nevada State Board of Medical Examiners

The Nevada State Board of Medical Examiners is the primary regulatory body for physician licensing and CPOM enforcement in Nevada. The Board is composed of licensed physicians and is empowered to investigate complaints, conduct formal hearings, and impose disciplinary actions including license suspension and revocation. The Board can also refer matters to the Nevada Attorney General for civil enforcement action.

Nevada's Board is relatively active in comparison to states of similar size. Its enforcement history includes actions against medical spas where non-physician owners controlled clinical protocols, aesthetic medicine practices where the nominal physician "supervisor" had minimal actual involvement, and telehealth companies that employed physicians through non-professional entities. The Board is particularly alert to situations in which a physician's license is being used as a credential to enable a non-physician business without genuine physician oversight.

In addition to the Board, the Nevada Division of Public and Behavioral Health oversees licensed healthcare facilities. Facilities that operate in violation of CPOM requirements can face facility license actions, which compound the individual physician discipline risk.

Nevada-Specific Wrinkles: What Makes This State Distinct

The "Stricter Than It Looks" Phenomenon

Many founders form Nevada LLCs or corporations for non-healthcare businesses and reasonably conclude that Nevada's flexible corporate law applies equally to healthcare ventures. It does not. The Professional Corporations Act carves out professional services — including medicine — from the general flexibility that makes Nevada attractive for ordinary business. A Nevada LLC owned by a non-physician cannot provide medical services, employ physicians for medical practice, or bill for physician services. The corporate wrapper is irrelevant to this prohibition.

The Out-of-State Entity Question

Some founders attempt to operate a Nevada medical practice through a professional corporation formed in another state — typically California, Delaware, or Texas — registered to do business in Nevada. Nevada's approach to foreign professional corporations is restrictive. A foreign PC must comply with Nevada's Professional Corporations Act requirements to operate as a medical practice in the state, which means the shareholder must be a licensed Nevada physician. Simply registering a foreign PC in Nevada does not cure the physician-ownership requirement for a Nevada medical practice. As a practical matter, most healthcare attorneys advise forming a Nevada domestic professional corporation for Nevada medical practice operations.

Concierge Medicine and Direct Primary Care

Nevada has a growing concierge medicine and direct primary care (DPC) market, particularly in Las Vegas. DPC arrangements, where patients pay monthly membership fees directly to a physician practice, must still comply with CPOM requirements. The subscription-based payment model does not change the entity ownership analysis. A DPC practice in Nevada must be owned by a Nevada-licensed physician through a properly structured professional entity.

Medical Spas and Aesthetic Medicine

Nevada's medical spa industry — concentrated in Las Vegas — is a significant area of CPOM enforcement activity. Non-physician owners of medical spas that provide Botox, dermal fillers, laser treatments, and other procedures requiring physician involvement must structure their operations through an MSO-PC model. The Board has pursued enforcement actions against medical spas where the physician involvement was nominal and the non-physician owner controlled all clinical and operational decisions.

The MSO-PC Structure in Nevada

The Management Services Organization / Professional Corporation model is the standard compliance approach for non-physician founders in Nevada. The structure requires careful documentation to withstand Board scrutiny.

Entity Formation

The PC must be formed under Nevada's Professional Corporations Act (NRS Chapter 89) with 100% physician ownership. The PC is the entity that provides medical services, employs or contracts with physicians and other licensed clinicians, and bills for professional services. The MSO — owned by the founders, investors, or any non-physician party — provides all non-clinical management services under a written Management Services Agreement.

The Management Services Agreement

The MSA is the governing document that defines the MSO-PC relationship in Nevada. Key elements of a Nevada-compliant MSA include:

• An unambiguous reservation of all clinical decision-making authority to the physician-owner and the PC's clinical staff
• A clearly defined list of management services the MSO provides — limited to administrative, operational, and technology services that do not involve clinical judgment
• A management fee that is supported by a third-party FMV analysis and is not structured as a percentage of clinical revenue in a way that could be characterized as fee-splitting
• A prohibition on the MSO directing the prescription, diagnosis, or treatment decisions of the PC's clinical providers
• Termination provisions that give the PC adequate notice and transition time — Nevada regulators are skeptical of MSAs where the MSO can immediately pull services or otherwise coerce the physician

Documentation of Physician Oversight

The Nevada Board expects that the physician-owner of the PC is genuinely involved in clinical governance. This means maintaining documented evidence of the physician's participation in protocol development, QA meetings, credentialing decisions, and clinical policy reviews. A physician who cannot describe the clinical governance framework of their PC or point to contemporaneous records of their involvement will struggle to defend the arrangement under Board scrutiny.

What Digital Health and Telehealth Founders Specifically Need to Know

Nevada has made meaningful progress in expanding telehealth access. Nevada has enacted telehealth parity legislation requiring insurers to cover telehealth services on par with in-person services. The state permits synchronous (live audio-video) and asynchronous (store-and-forward) telehealth, and Nevada physicians may establish a physician-patient relationship via telehealth for most services without a prior in-person visit.

For digital health companies, several Nevada-specific considerations apply:

• Nevada license requirement. Physicians treating Nevada patients via telehealth must hold a current Nevada medical license, even if they are physically located in another state. Nevada does not participate in the Interstate Medical Licensure Compact as broadly as some states. Confirm licensure requirements before routing patients to out-of-state physicians.
• Controlled substance prescribing. Nevada has specific requirements for telehealth prescribing of controlled substances, which must comply with both Nevada law and federal DEA requirements. Review your prescribing workflow carefully before launching any service line that may include Schedule III-V prescriptions.
• The Las Vegas market opportunity. Las Vegas is one of the fastest-growing large cities in the United States and has historically been underserved in primary care and specialty care. Digital health companies entering the Las Vegas market will find significant demand — and a Board that is paying increasing attention to how new entrants structure their operations.
• NP full practice authority. Nevada grants full practice authority to nurse practitioners, meaning NPs can practice, diagnose, and prescribe independently without physician supervision or a collaborative practice agreement in most settings. This creates a structural option for some digital health services that can be delivered by NPs without a physician-owned PC structure. However, if your platform's services include physician-only services (such as certain controlled substance prescribing or services requiring MD/DO licensure), the full NP practice authority does not eliminate the need for a compliant physician entity structure for those specific services.

Nevada CPOM Compliance Checklist

1. Form a Nevada domestic professional corporation under NRS Chapter 89 with a Nevada-licensed physician as the 100% shareholder.
2. Confirm the PC owner holds a current, active Nevada medical license — verify through the Nevada State Board of Medical Examiners online licensure system.
3. Draft a Management Services Agreement that reserves all clinical decision-making to the PC, limits MSO authority to defined administrative services, and includes FMV-supported fee terms.
4. Commission a fair market value analysis of the management fee from a qualified healthcare valuation firm and review it annually.
5. Document physician-owner involvement in clinical governance — maintain board meeting minutes, written protocol approvals, credentialing records, and QA review participation.
6. Audit the employment chain — confirm that clinical providers are employed by or contracted with the PC, not by the MSO or any other lay entity.
7. Confirm all physicians treating Nevada patients hold current Nevada licenses — for telehealth platforms serving Nevada patients, verify each provider's licensure status.
8. Review controlled substance prescribing workflows for compliance with Nevada prescribing rules and DEA requirements.
9. Assess whether NP full practice authority provides a compliant pathway for any of your service lines without a physician PC structure, and document the analysis.
10. Implement an annual compliance review covering the MSA, FMV documentation, PC governance records, and all provider license verifications.

Building Compliantly in a Growing Market

Nevada's healthcare market is expanding rapidly, driven by population growth in Las Vegas and Reno, improving infrastructure, and increasing demand for digital health services among a population that skews younger and more mobile than the national average. For digital health founders, this makes Nevada an attractive expansion target. But the same factors that make Nevada a market opportunity — rapid growth, underserved populations, and a lean regulatory footprint for non-healthcare businesses — also mean that the state's healthcare regulators are increasingly attentive to how new entrants are structured. The Nevada State Board of Medical Examiners is sophisticated about the MSO-PC model and will scrutinize arrangements that use the form of a professional corporation without the substance of genuine physician control. Get your Nevada structure right from the beginning, and you will be well-positioned to capture one of the most dynamic healthcare growth markets in the western United States.