Pennsylvania telehealth MSO-PC: licensure, Act 42 coverage, and PC ownership
Pennsylvania has no separate telemedicine license, a 2024 insurance law that changed how payers cover virtual care, and a corporate practice doctrine older than most state statutes.
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A Pennsylvania telehealth company needs a Pennsylvania license for each clinician who treats patients located in Pennsylvania, a professional corporation owned by licensed physicians under the Professional Corporation Law (15 Pa.C.S. Chapter 29), and an MSO paid a fair-market-value fee. 40 Pa.C.S. Chapter 48 (Act 42 of 2024) requires insurers to cover medically necessary telemedicine from in-network providers for policies filed on or after March 31, 2025, and holds virtual care to the in-person standard of care. Foundry forms the MSO-PC for $15,000 and matches a Pennsylvania-licensed friendly PC owner for $3,000/mo.
Pennsylvania is a Moderate state on the CPOM 50-state guide, and the doctrine runs back to a 1938 Supreme Court case. Read Pennsylvania CPOM for the case law and statutes, then CPOM compliance for the operating test. General information only, not legal advice.
Licensure: a Pennsylvania license, no telemedicine add-on
The Department of State telemedicine FAQs answer two questions founders ask most. Licensees under the health boards can provide services within their scope by telemedicine when it meets accepted standards of care. And practitioners who provide services to people in Pennsylvania need a Pennsylvania license, whether the visit is in person or online. The Medical Practice Act of 1985 limits medicine to licensed physicians, so the license rule follows the patient.
Pennsylvania participates in the Interstate Medical Licensure Compact, which gives eligible physicians a faster path to additional state licenses. The compact speeds up licensing. Each physician still holds a separate Pennsylvania license.
Act 42 of 2024: what payers must cover
| Section | Rule | What it means for a platform |
|---|---|---|
| § 4802 | Telemedicine includes synchronous visits, asynchronous interactions, and remote patient monitoring on HIPAA-compliant technology | Store-and-forward and RPM programs fall inside the definition |
| § 4803(a) | Insurers cover medically necessary telemedicine from participating network providers and cannot exclude a service solely because it is virtual | Credential the PC with payers so its clinicians are in network |
| § 4803(a)(2) | Payment follows the negotiated contract and cannot depend on a proprietary platform | Rates are a contract question, so negotiate them |
| § 4803(b) | Applies to policies with forms or rates filed on or after March 31, 2025 | Coverage arrives plan by plan through 2025 and 2026 |
| § 4805 | Same standard of care as in person | Clinical protocols set by the PC, not by the growth team |
Coverage runs to in-network providers. The network contract belongs to the physician-owned PC, under its own tax ID and group NPI. An MSO that enrolls itself with payers has put the claim in the wrong entity.
Who owns the Pennsylvania practice
Pennsylvania's rule starts with Neill v. Gimbel Brothers (1938): a lay corporation cannot practice a licensed health profession. The Professional Corporation Law (15 Pa.C.S. Chapter 29) keeps that current by limiting medical PC shares to licensed professionals. Courts and boards apply the same logic to psychology and counseling, so behavioral health platforms that mix prescribers and therapists may need more than one professional entity.
| Role | Where it sits | Pennsylvania note |
|---|---|---|
| Physician owner | Owns the Pennsylvania PC | Licensed professionals only as shareholders |
| Treating clinicians | Employed or contracted by the PC | Each licensed in Pennsylvania |
| Founder and investors | Own the MSO, often a Delaware LLC | The MSO can be out of state; the PC is the clinical employer |
| MSO fee | Written management services agreement | Fixed or cost-plus at fair market value |
Controlled substances
Prescribers check the Pennsylvania PDMP under the ABC-MAP Act each time they prescribe an opioid or a benzodiazepine. The DEA telemedicine flexibilities under 21 CFR 1307.41 run through December 31, 2026, and each prescriber needs a DEA registration for the state where the patient sits. Build both steps into the prescribing flow.
Setup steps for a Pennsylvania telehealth company
- List each visit type, the payers you plan to bill, and any controlled substances.
- Match a Pennsylvania-licensed physician to own the PC through friendly PC owner matching ($3,000/mo).
- Form the Pennsylvania PC and the MSO, and sign a fair-market-value MSA. See MSO-PC formation ($15,000).
- License every treating clinician in Pennsylvania, using the compact where it helps.
- Credential the PC with payers so Act 42 coverage applies to its in-network clinicians.
- Route all clinical payments to the PC's bank account and keep separate books.
Pricing
MSO-PC formation
$15,000One-time. The MSO and the Pennsylvania physician-owned PC, scoped to your visit model.
Friendly PC owner
$3,000/moA Pennsylvania-licensed physician who owns your PC.
Pennsylvania telehealth MSO-PC FAQ
Do I need a Pennsylvania license to treat Pennsylvania patients by telemedicine?
Yes. The Department of State says practitioners who provide services to people in Pennsylvania need a Pennsylvania license, in person or by telemedicine. Pennsylvania does not issue a separate telemedicine license, and licensees can practice by telemedicine within their scope under accepted standards of care.
What did Act 42 of 2024 change?
Act 42 added Chapter 48 to Title 40. Insurers must cover medically necessary services delivered by telemedicine through in-network providers, consistent with their medical policies, and cannot deny payment solely because a service was virtual. It applies to policies with forms or rates filed on or after March 31, 2025. Section 4805 holds telemedicine to the same standard of care as an in-person visit.
Does Act 42 require payment parity?
No. Reimbursement follows the contract between the insurer and the in-network provider. Act 42 bars denying payment solely because a service was delivered by telemedicine and bars requiring a proprietary platform.
Can a lay founder own a Pennsylvania medical practice?
Not the clinical entity. Pennsylvania's corporate practice doctrine dates to Neill v. Gimbel Brothers (1938), and the Professional Corporation Law limits medical PC shares to licensed professionals. The founder owns the MSO.
How much does Foundry charge for a Pennsylvania telehealth MSO-PC?
MSO-PC formation is $15,000 one-time. A Pennsylvania-licensed friendly PC owner is $3,000/mo.
Related reading
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