Colorado Corporate Practice of Medicine Rules (2026 Guide)

Colorado has one of the most explicit CPOM rules in the country. Its medical practice statute is widely summarized as stating that corporations may not practice medicine. Medical professional corporations must be majority-owned by Colorado-licensed physicians. Physician assistants are reported to be able to hold a minority stake, which is unusual. Hospitals and certain other employers may employ physicians under a separate statutory exception. As of October 2026, a non-physician founder cannot own a Colorado medical practice entity, and the standard structure is a physician-owned PC with an MSO. Colorado's recent change is on the telehealth side. Out-of-state physicians can now register to treat Colorado patients by telehealth without a full license, though registrants are reported to be barred from prescribing controlled substances. NP founders face fewer limits. Colorado NPs have full practice authority, and PAs now practice under collaborative agreements.

This is general information, not legal advice. Confirm the current rules with a healthcare attorney licensed in Colorado. Last reviewed October 2026. State rules change often; statute and case references are summaries, not quotations.

Key takeaways

• Colorado's medical practice act, in C.R.S. 12-240-138, is widely summarized as barring corporations from practicing medicine.
• Shareholders of a Colorado medical professional service corporation generally must be Colorado-licensed physicians; the statute is reported to let licensed physician assistants hold shares as long as physicians keep majority ownership.
• The statute treats employment of a physician in compliance with C.R.S. 25-3-103.7 as outside the corporate practice of medicine, which is the statutory path for hospitals and similar employers.
• Out-of-state physicians and PAs can now register under C.R.S. 12-30-124 to provide telehealth to Colorado patients; registrants are reported to be barred from prescribing controlled substances or providing in-person care, so confirm current limits.
• Colorado NPs have full practice authority, and since 2023 Colorado PAs practice under collaborative agreements rather than physician supervision.

Does Colorado have a corporate practice of medicine doctrine?

Yes, and it is written into the statute. C.R.S. 12-240-138 addresses physician professional service corporations, LLCs, and registered limited liability partnerships. It also states, in substance, that corporations may not practice medicine. Confirm the current wording against the official text.

The current wording follows a court fight. In Pediatric Neurosurgery, P.C. v. Russell, the Colorado Supreme Court addressed how the professional corporation statute interacts with the CPOM doctrine, and commentators describe the decision as exposing physician corporations to vicarious liability for their doctors. As reported by The Gazette, the legislature later responded. As reported, it restated that corporations may not practice medicine and carved out employment that complies with C.R.S. 25-3-103.7. Secondary sources describe Russell as legislatively overruled on that point. Have counsel confirm the current statute's treatment of claims against a professional corporation.

The result for founders is clear. Colorado has a strong, codified CPOM rule. The exceptions are specific, and a general lay-owned telehealth company is not one of them.

Who can own a medical practice in Colorado?

Professional service corporation, LLC, or RLLP. Under 12-240-138, shareholders of a medical professional service corporation generally must be persons licensed by the Colorado Medical Board. The reported exception is that licensed physician assistants may hold shares, as long as physician shareholders keep majority ownership. The statute also addresses what happens to a deceased shareholder's shares; have counsel confirm the current terms. Whether the same ownership limits apply in the same way to physician LLCs and RLLPs should also be confirmed with counsel.

Employers under 25-3-103.7. Section 12-240-138 treats employing a physician in accordance with 25-3-103.7 as outside the corporate practice of medicine. That section is the path for hospitals and certain other health care entities. Secondary sources report that it comes with conditions, including that the employer may not control the physician's independent medical judgment or require exclusive referrals.

Possible change for aesthetics. A 2026 bill, HB 26-1249, would have let PAs own a majority of a corporation organized to provide medical-aesthetic services. We have not confirmed whether it was enacted or its final terms; check before relying on it.

Can nurse practitioners and physician assistants own a practice in Colorado?

NPs. Colorado is a full practice authority state. NPs with full prescriptive authority practice and prescribe without a supervising or collaborating physician. New prescribers first hold provisional authority and complete a mentorship period under Board of Nursing rules; confirm the current mentorship requirements with the board. An NP-owned practice is common in Colorado. Note that 12-240-138's ownership rules govern medical corporations, so an NP practice is typically organized around the nursing license, not as a medical PC.

PAs. Since August 7, 2023, under SB23-083, Colorado PAs practice under a collaborative agreement with a physician, podiatrist, or physician group instead of supervision. Less experienced PAs, and PAs changing practice areas, generally work under a more supervisory-style agreement for an initial period; confirm the current hour thresholds. An employer cannot require a physician to sign a collaborative agreement as a condition of employment. On ownership, Colorado appears unusually PA-friendly. PAs are reported to be able to hold minority stakes in a medical professional corporation.

How does the friendly PC-MSO model work in Colorado?

Because direct lay ownership is barred, the friendly PC-MSO model is the default for non-physician founders. A Colorado-licensed physician owns the PC, which employs or contracts with clinicians. Your MSO supplies the platform, brand, non-clinical staff, billing, and marketing under a management services agreement.

Colorado-specific drafting points:

• Clinical control stays with the PC. The statute bars corporations from practicing medicine. Avoid MSA terms that let the MSO set clinical protocols, choose which clinicians treat which patients, or override prescribing.
• PA equity may be available. If a PA is part of your founding team, Colorado law is reported to allow a minority stake in the PC alongside a physician majority; confirm with counsel.
• Fees. We did not confirm a specific Colorado physician fee-splitting provision for this guide. Set fair-market-value fees for defined services and avoid per-referral pricing, which also matters under federal anti-kickback rules.

What does this mean for a telehealth brand serving Colorado patients?

Colorado recently opened a new door. Under C.R.S. 12-30-124, enacted by SB24-141, out-of-state physicians, PAs, and other listed professionals can register to provide telehealth to Colorado patients. The Colorado Division of Professions and Occupations FAQ describes eligibility conditions, including an active, unencumbered out-of-state credential and a clean recent disciplinary history, along with ongoing duties such as designating an agent for service of process, reporting new discipline, and making disclosures to patients. The program may have been amended since enactment, so confirm the current effective date, eligibility rules, and deadlines with the DPO.

The limits matter for product design. As reported, registrants may prescribe non-controlled medications under Colorado's practice standards but may not prescribe controlled substances or provide in-person care. Confirm those limits before designing around them. A weight-loss or primary-care telehealth program using non-controlled drugs may be able to rely on registrants. A program that prescribes controlled substances needs fully licensed Colorado clinicians.

Registration solves licensure, not CPOM. The Colorado patient's encounter is still Colorado practice, so the PC that employs the registrant must meet Colorado's ownership rules. Compare neighboring rules in our Arizona CPOM guide, and see our telehealth licensing by state guide.

Colorado CPOM at a glance

Frequently asked questions

Can a non-physician own a medical practice in Colorado?

No, not the practice entity. Colorado's statute bars corporations from practicing medicine and generally limits medical professional corporation shareholders to Colorado-licensed physicians, with PAs reportedly allowed as minority holders. Non-physician founders typically own an MSO that contracts with a physician-owned PC.

Can a physician assistant own part of a Colorado medical practice?

Reportedly yes. Colorado's statute is reported to allow licensed physician assistants to be shareholders in a medical professional service corporation as long as physicians keep majority ownership. Confirm the current text with counsel.

Can out-of-state doctors treat Colorado patients by telehealth?

Yes, if they register under C.R.S. 12-30-124. Registrants need an unencumbered out-of-state license and are reported to be barred from prescribing controlled substances and from seeing patients in person in Colorado. Confirm current rules with the Colorado Division of Professions and Occupations.

Can hospitals employ physicians in Colorado?

Yes. Colorado's statute treats employment of a physician in compliance with C.R.S. 25-3-103.7 as outside the corporate practice of medicine. That exception is reported to require that the employer not control the physician's independent medical judgment.

Do nurse practitioners need a collaborating physician in Colorado?

Not once they hold full prescriptive authority. Colorado is a full practice authority state, though new NP prescribers first complete a mentorship period under provisional authority.

Sources

• C.R.S. 12-240-138, Professional service corporations for the practice of medicine (Justia)
• Pediatric Neurosurgery, P.C. v. Russell (Justia)
• The Gazette: Health care employers shielded by doctrine
• C.R.S. 12-30-124, Out-of-state telehealth providers (Justia)
• Colorado DPO: Out-of-State Telehealth Providers FAQ
• Colorado General Assembly: SB23-083, Physician Assistant Collaboration Requirements
• Colorado General Assembly: SB24-141, Out-of-State Telehealth Providers

Compare Colorado with every other state in our corporate practice of medicine 50-state guide.

Launch in Colorado on a structure that is already built

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