Kansas Corporate Practice of Medicine and Professional Entity Formation by Kansas Licensed Healthcare Professionals
Physicians or other licensed healthcare-related professionals in Kansas should be aware of the corporate practice of medicine doctrine when considering employment or contracting with a certain entity, merging their entity with another, or partnering with others to form their own entity.
The Kansas corporate practice of medicine doctrine prohibits general business entities from hiring or contracting with a physician to practice medicine if the entity itself is not licensed to provide such services. Additionally, if a physician forms an entity for the practice of medicine, the entity must be wholly owned by licensed physicians or certain other licensed professionals specified by state statute.
Although commonly referred to as the corporate practice of medicine doctrine, the same rules apply to numerous licensed professions in Kansas, including all the following heath care and related professions:
- Osteopathic physicians or surgeons
- Physicians, surgeons, or doctors of medicine
- Licensed psychologists
- Specialists in clinical social work
- Licensed physical therapists
- Registered professional nurses
- Clinical professional counselors
- Clinical psychotherapists
- Licensed marriage and family therapists
- Licensed physician assistants
- Licensed occupational therapists
- Licensed audiologists
- Licensed speech-pathologists
- Licensed naturopathic doctors
If you are a professional in any of these fields and considering accepting employment or contracting with an entity to provide your professional services, you should first ensure that the entity itself is licensed to provide those services or otherwise permitted to do so by state statute.
If you are considering forming an entity to provide your professional services, your entity should be formed as a “professional” corporation or limited liability company pursuant to the Kansas professional corporation statutes, and your entity should be wholly owned by the same type of licensed professionals, unless ownership by other types of licensed professionals is specifically authorized by a state statute or regulation. Generally, your professional corporation or limited liability company must be organized only for the purpose of rendering one type of professional service and service ancillary thereto and shall not engage in any other business. However, a single professional corporation or limited liability company may be organized to and render professional services under any two or more of the types set forth in the following groups:
- Chiropractors; dentists; optometrists; osteopathic physicians or surgeons; physicians, surgeons, or doctors of medicine; podiatrists; pharmacists; licensed phycologists; specialists in clinical social work; licensed physical therapists; registered professional nurses; clinical professional counselors; clinical psychotherapists; clinical marriage and family therapists; licensed audiologists; and licensed speech-pathologists.
- Osteopathic physicians and surgeons; physicians, surgeons, or doctors of medicine; registered professional nurses; licensed physician assistants; licensed occupational therapists; licensed audiologists; and licensed speech-pathologists.
- Licensed physical therapists and licensed occupational therapists.
Some business relationships between general business entities and licensed professionals or professional entities are permitted when the relationship is not for the purposes of the professional services. For example, licensed healthcare related professionals and professional entities often engage with management companies to assist with or handle certain administrative functions.
If you are a Kansas licensed healthcare-related professional and are thinking about new employment, a new affiliation, or forming your own entity, the Health and Business attorneys at Martin Pringle are ready to assist.
For a discussion of the treatment of similar topics in Missouri, click here.