--- title: "Indiana Corporate Practice of Medicine Rules (2026 Guide)" description: "Indiana corporate practice of medicine explained: no single CPOM statute, but PC share limits, a hospital carve-out and fee-division rules shape ownership." slug: indiana-corporate-practice-of-medicine date: 2026-10-18 updated: 2026-10-18 author: MyOrbitHealth Compliance Team category: Compliance cpom: Moderate --- # Corporate Practice of Medicine in Indiana: What Telehealth and Clinic Founders Need to Know Indiana enforces a moderate corporate practice of medicine rule, but you will not find it in one statute. As of October 2026, the rule is pieced together from three things. The physician licensing law bars unlicensed practice. The Professional Corporation Act limits who may hold shares in a medical PC. And an express exclusion lets hospitals and certain other entities employ physicians, as long as they do not control the physician's independent medical judgment. For a non-physician founder, the practical answer is that you should not own the clinical entity directly. The usual route is a management services organization that contracts with a physician-owned PC. For an NP or PA founder, Indiana is a reduced-practice state, so physician collaboration stays part of the model even if you own the business side. This is general information, not legal advice. Confirm the current rules with a healthcare attorney licensed in Indiana. *Last reviewed October 2026. State rules change often; statute and case references are summaries, not quotations.* ## Key takeaways - Indiana has no code section titled "corporate practice of medicine"; the restriction comes from the physician practice act (IC 25-22.5) and the Professional Corporation Act (IC 23-1.5). - Under IC 23-1.5-3-1, an Indiana professional corporation may issue shares only to people authorized to render its professional service and to a few qualifying entities, and nonconforming share issuances or transfers are void. - IC 25-22.5-1-2 generally excludes licensed hospitals from the physician practice act, and their employment of physicians is generally not unlawful practice if they do not control the physician's independent medical judgment. - An Indiana Medical Licensing Board rule generally bars physicians from dividing fees with practitioners outside their partnership, employment or professional corporation without full disclosure to and consent from the patient. Confirm the rule's current text, including any additional conditions. - Indiana generally requires out-of-state clinicians to hold an Indiana license to treat Indiana patients by telehealth. ## Does Indiana have a corporate practice of medicine doctrine? Yes, in a moderate, statute-driven form. Indiana's version is less about a court-made ban and more about how its statutes fit together. **The licensing law.** The physician practice act at IC 25-22.5 makes practicing medicine without an Indiana license unlawful. A general business corporation cannot hold a medical license. So a lay company that hires physicians and sells their services as its own is exposed. **The exclusions.** [IC 25-22.5-1-2](https://codes.findlaw.com/in/title-25-professions-and-occupations/in-code-sect-25-22-5-1-2.html) lists who the article does not apply to, and licensed hospitals are among the listed entities. The section also adds a key condition: an employment or contract relationship between a listed entity and a licensed physician is generally not unlawful practice if the entity does not control the physician's independent medical judgment. Confirm the current text of the exclusions and that condition with Indiana counsel. Separately, [IC 16-21-2-9](https://law.justia.com/codes/indiana/title-16/article-21/chapter-2/section-16-21-2-9/) makes clear that hospital licensure itself does not authorize anyone to practice medicine. It does let hospital employees perform services that a licensed practitioner delegates or orders. So listed entities such as hospitals may employ physicians. A typical telehealth startup is not on the list. ## Who can own a medical practice in Indiana? Physicians typically own Indiana practices through a professional corporation under the Professional Corporation Act, IC 23-1.5. The share rules are the heart of it. Under [IC 23-1.5-3-1](https://law.justia.com/codes/indiana/title-23/article-1-5/chapter-3/section-23-1-5-3-1/), a professional corporation may issue shares, and options to buy shares, only to: - individuals authorized to render the corporation's professional service; - general partnerships whose partners are all so authorized; - other professional corporations; and - the trustee of a qualified trust. Shareholders may transfer or pledge shares only to the same categories, and a transfer that breaks the rule is void. Each share certificate must state the restriction on its face. The licensing authority can also adopt tighter rules for its profession. Indiana commentators disagree on one detail: whether a medical PC must be 100% physician-owned or needs only one Indiana-licensed shareholder, with naming limits for using "medical." Plan for full physician ownership of the clinical PC unless Indiana counsel signs off on something else. ## Can nurse practitioners and physician assistants own a practice in Indiana? **Nurse practitioners:** Indiana is a reduced-practice state. NPs generally practice under a collaborative arrangement with a physician, especially for prescriptive authority. An NP can own the business entity. The clinical model likely still needs a collaborating physician, so budget for one from day one, and confirm whether any newer law lets experienced NPs practice without one. **Physician assistants:** Indiana PAs generally practice in collaboration with a physician. A PA-led brand should expect to need a collaborating physician relationship in place before seeing patients; confirm the current requirements. Plan for that relationship, and its cost, before you launch. Neither NPs nor PAs can be shareholders of a physician PC under IC 23-1.5-3-1, because they are not authorized to render the PC's professional service, which is medicine. An NP- or PA-founded brand that wants physician services usually pairs with a physician-owned PC. ## How does the friendly PC-MSO model work in Indiana? The [friendly PC-MSO model](/blog/friendly-pc-mso-model) fits Indiana's framework well. The physician-owned PC holds the clinical relationship, employs or contracts with providers, and bills. The MSO, which non-physicians can own, provides non-clinical services under a management services agreement: technology, marketing, billing support, staffing and facilities. Indiana-specific points: - **Fee division.** The Medical Licensing Board's [fee-division rule](https://www.law.cornell.edu/regulations/indiana/844-IAC-5-2-10) generally says a physician may not divide a professional fee with another practitioner who is not a partner, employee or shareholder of the same professional corporation unless the patient consents after full disclosure. Confirm the rule's full current text, including any additional conditions. That rule targets practitioner-to-practitioner splits. MSO fees should still be priced at fair market value for real services, not as a cut of professional revenue tied to referrals. - **Share control.** Because transfers that break IC 23-1.5-3-1 are void, stock transfer restriction agreements and succession provisions should only move shares to an eligible physician. They should never move them to the MSO itself. - **Clinical independence.** Borrow the hospital exclusion's test: the MSO must not control independent medical judgment. Keep protocols, prescribing and clinical staffing with the PC. - **Ownership reporting.** Indiana has reportedly adopted health care entity ownership reporting requirements. Reports describe them as covering many practices, with a possible exemption for those majority-owned by Indiana practitioners. Confirm the law's current status, effective dates and exemptions; MSO-backed practices should confirm whether they must file. ## What does this mean for a telehealth brand serving Indiana patients? CPOM and licensure both follow the patient. If the patient is in Indianapolis, Indiana rules apply, wherever your company is based. **Licensure.** Indiana generally requires an Indiana license for out-of-state clinicians treating Indiana patients by telehealth; confirm whether any interstate compact privilege is available for your clinician type. We are not aware of a general telehealth registration shortcut. Build an Indiana-licensed provider panel; our [telehealth licensing by state guide](/blog/telehealth-licensing-by-state) covers the details. **Structure.** Put Indiana patients under a PC whose physician owner holds an Indiana license, served by your MSO. If you also operate in Kentucky, see our [Kentucky CPOM guide](/blog/kentucky-corporate-practice-of-medicine), since the two states take different approaches. ## Indiana CPOM at a glance | Topic | Indiana (as of October 2026) | |---|---| | CPOM enforcement | Moderate | | Primary legal basis | IC 25-22.5 (physician licensing and exclusions); IC 23-1.5 (Professional Corporation Act) | | Professional entity options | Professional corporation with shares limited by IC 23-1.5-3-1; hospitals excluded under IC 25-22.5-1-2 | | Fee-splitting rule | Medical Licensing Board rule: generally no fee division outside the partnership, employment or PC without patient disclosure and consent | | NP practice authority | Reduced | | Out-of-state telehealth licensing | No (Indiana license generally required) | | Typical structure for non-physician founders | MSO owned by founders contracting with a physician-owned Indiana PC | ## Frequently asked questions ### Can a non-physician own a medical practice in Indiana? Not the clinical entity itself in most cases. Indiana professional corporation shares may only be issued to people authorized to render the PC's professional service and a few qualifying entities. Non-physicians typically own a management services organization that contracts with a physician-owned PC. ### Can a company employ physicians in Indiana? Licensed hospitals and certain other entities listed in IC 25-22.5-1-2 may generally employ physicians, provided they do not control the physician's independent medical judgment. A typical for-profit telehealth company is not on that list. It should use a physician-owned PC rather than employing physicians directly. ### Does Indiana prohibit fee splitting? An Indiana Medical Licensing Board rule generally bars physicians from dividing a professional fee with a practitioner outside their partnership, employment or professional corporation unless the patient consents after full disclosure. MSO fees should be set at fair market value and not tied to referrals. ### Can a nurse practitioner own a practice in Indiana? An NP can own a business, but Indiana is a reduced-practice state. NPs generally need a collaborative arrangement with a physician; confirm the current requirements. An NP cannot be a shareholder in a physician professional corporation. ### Do out-of-state telehealth providers need an Indiana license? Generally, yes. We are not aware of a general out-of-state telehealth registration in Indiana, so clinicians treating patients located in Indiana should generally hold an Indiana license. Confirm whether a compact privilege is available for your clinician type. ## Sources - [IC 23-1.5-3-1, Professional corporation shares (Justia reproduction)](https://law.justia.com/codes/indiana/title-23/article-1-5/chapter-3/section-23-1-5-3-1/) - [IC 23-1.5, Professional Corporations (Indiana General Assembly, 2026 Code)](https://iga.in.gov/ic/2026/Title_23/Article_1.5.pdf) - [IC 25-22.5-1-2, Exclusions from the physician practice act (FindLaw reproduction)](https://codes.findlaw.com/in/title-25-professions-and-occupations/in-code-sect-25-22-5-1-2.html) - [IC 16-21-2-9, Hospital licensure and practice of medicine (Justia reproduction)](https://law.justia.com/codes/indiana/title-16/article-21/chapter-2/section-16-21-2-9/) - [844 IAC 5-2-10, Fee division (Cornell LII)](https://www.law.cornell.edu/regulations/indiana/844-IAC-5-2-10) For how Indiana compares with other states, see our [corporate practice of medicine 50-state guide](/blog/corporate-practice-of-medicine-50-state-guide). ## Launch in Indiana on a structure that is already built MyOrbitHealth can form a PC-MSO structure for your brand, supply a physician PC owner or collaborating physician, or let you launch on its existing MSO / friendly-PC structure with 2,400+ licensed providers. MyOrbitHealth does not practice medicine; licensed providers make every clinical decision. Explore [PC-MSO formation](/pc-mso-formation), [physician PC owner services](/physician-pc-owner), or [book a call](https://myorbithealth.com/book). ```html ```