CPOM Compliance for Indiana Healthcare Startups
Indiana is more flexible than California or New York on classic CPOM, but IC 25-22.5 still expects licensed physicians to control clinical judgment, and IC 23-1.5 still governs who owns the professional corporation.
Get a Free CPOM AssessmentThe law in Indiana
Key authorities (official text)
Medical Licensing Board of Indiana · IC 25-22.5 · IC 23-1.5Medical Licensing Board of Indiana · IC 25-22.5 (Physicians) · IC 25-22.5-1-1.1 · IC 25-22.5-1-2 · IC 25-22.5-8-1 · IC 23-1.5 (Professional Corporations) · IC 23-1.5-2-3 · IC 23-1.5-2-4.
Indiana CPOM is Moderate. The state does not copy California Business & Professions Code § 2400. IC 25-22.5-1-1.1 defines the practice of medicine. IC 25-22.5-8-1 is the unlawful-practice overlay. IC 23-1.5 is how an Indiana professional corporation is formed and owned. Indianapolis and multi-state telehealth diligence still wants a physician-owned PC plus a fair-market-value MSA so ownership, funds flow, and the independent-judgment line have one answer.
Do not cite IC 25-22.5-1-2 as a blanket corporate-practice ban. That section is titled exclusions: who the Medical Practice Act does not apply to. Hospitals, HMOs, and listed health-care organizations appear there. Subsection (c) is the operator line: an employment or contractual relationship with those listed entities does not constitute the unlawful practice of medicine if the entity does not direct or control independent medical acts, decisions, or judgment of the licensed physician. That is a control test, not a digital-health exemption. A venture-backed MSO is not a hospital under 25-22.5-1-2.
Indiana is not permission for a lay LLC to hold the practice of medicine. Chapter 25-22.5 licenses people, not operating companies. A medical-director title on a Delaware company does not satisfy that. The Medical Licensing Board of Indiana docket is heavier on individual physician misconduct than on proactive MSO audits. That is an enforcement posture, not a structural waiver. Collaboration for NPs/PAs is a different job from owning the Professional Corporation. See collaborating physician vs physician PC owner. Longer narrative: Indiana CPOM blog guide.
Typical PC / MSO structure in Indiana
Form an Indiana professional corporation under IC 23-1.5 owned by an Indiana-licensed MD or DO. IC 23-1.5-2-3 is who may form the PC. IC 23-1.5-2-4 requires licensed professionals as directors and as officers other than secretary and treasurer. The MSO (often the Delaware operating company) provides non-clinical services under a written MSA at fair market value. Clinical revenue lands in the PC. Foundry forms that structure ($15,000) and matches a friendly PC owner ($3,000/mo). Not a rented Super PC.
If you also treat California, New York, New Jersey, or Tennessee patients, Indiana’s Moderate label does not control those states. Start with the CPOM 50-state guide and form for the footprint you actually have.
When you still need a PC vs only an MSO
Use this as an operator rule, not a filing opinion. Confirm with counsel.
| Indiana fact pattern | Typical entity | Why |
|---|---|---|
| Indiana-only, cash-pay, physician already owns the practice | May stay on the existing professional entity | Still document clinical control and FMV admin if an MSO is in the picture |
| Venture-backed or multi-state telehealth that includes Indiana | Indiana-aware physician PC + FMV MSA | Buyers and payers test CPOM compliance the same way they do in strict states |
| Indiana plus California, New York, or New Jersey | Form for the strict states, then qualify Indiana | Indiana’s Moderate label does not soften B&P 2400, BCL § 1507, or N.J.A.C. 13:35-6.16 |
Fee-splitting and the independent-judgment line
IC 25-22.5-8-1 is Indiana’s unlawful-practice overlay. IC 25-22.5-1-2(c) is the independent-judgment line for listed health organizations. A percentage-of-collections management fee is the pattern that looks most like a split of professional fees and like de facto control. Prefer a fixed or FMV-supported admin fee. Pair this page with the fee-risk table on CPOM compliance.
| Indiana pattern | Risk | Safer pattern |
|---|---|---|
| Lay LLC owns the clinical practice | High for diligence even if commentators call Indiana Moderate | Licensed-professional PC under IC 23-1.5 |
| MSO paid % of professional collections | High: looks like control of judgment + fee split | Fixed FMV admin fee with a memo |
| Stretching the 25-22.5-1-2 hospital/HMO exclusion to a startup | High: that section is exclusions, not a digital-health waiver | Physician PC + FMV MSA; do not analogize to a licensed hospital |
| Physician PC + FMV MSA + separate books | Base case | Revisit FMV when volume changes |
Medical Licensing Board vs buyer / payer checks
The Medical Licensing Board disciplines licensees. Buyers and payers run a different file. Use both columns: license risk and diligence risk are not the same test. Full operating map: CPOM compliance.
| Who checks | What they sample | Indiana fail signal |
|---|---|---|
| Medical Licensing Board of Indiana | Unlicensed practice (IC 25-22.5-8-1); de facto clinical control | Figurehead PC owner; MSO writing protocols |
| Buyer diligence | Shareholder ledger vs Secretary of State; one claim from payer to PC bank to MSA invoice | MSO lockbox; percentage MSA; no Indiana-licensed owner |
| Payer / credentialing | Claim TIN and group NPI on the physician-owned PC | Marketing MSO TIN on the claim |
What Indiana founders need to know
- Indiana is Moderate, not “no CPOM.” Licensed physicians still control clinical judgment under IC 25-22.5.
- IC 25-22.5-1-2 is the exclusions article. Do not cite it as the ownership ban, and do not stretch the hospital/HMO list to a startup MSO.
- IC 23-1.5-2-3 / 23-1.5-2-4 are the professional-corporation ownership and officer rules.
- Indianapolis health-tech diligence still asks who owns the PC, who bills, and how the MSA is priced.
- Foundry does not drop clients into a plug-in 50-state PC. Multi-state needs a 50-state licensed physician.
Operational checklist: CPOM compliance. Setup path: MSO-PC formation ($15,000). Full map: CPOM 50-state guide. Book a call from the homepage.
Indiana CPOM FAQ
Does Indiana have strict CPOM?
Indiana is Moderate / more flexible than California or New York. There is no B&P § 2400 analogue. IC 25-22.5, IC 23-1.5, and IC 25-22.5-1-2(c) still expect licensed control of medicine and clean fees. Foundry keeps Indiana as Moderate on the CPOM 50-state guide.
Do I still need an MSO-PC in Indiana?
Yes for most venture-backed and multi-state models. The professional entity holds clinical care; the MSO is paid fair market value for non-clinical services.
How does Indiana treat fee-splitting?
IC 25-22.5-8-1 is the unlawful-practice overlay. A percentage-of-collections MSA is the high-risk pattern. Prefer a fixed FMV admin fee.
How does Foundry help with Indiana CPOM?
MSO-PC formation is $15,000 one-time. An Indiana-licensed physician PC owner is $3,000/mo. Foundry is not a law firm.