Louisiana CPOM Rules 2026: Who Can Own a Practice

Louisiana does enforce a corporate practice of medicine (CPOM) rule, but it is softer and less settled than in strict states. There is no single CPOM statute. The doctrine comes from the Louisiana State Board of Medical Examiners (LSBME), which updated its position in December 2024. The Board says a non-medical corporation may employ a physician. That employment is not unlawful on its own. But a corporation that directs how the physician treats patients is, in the Board's view, practicing medicine without a license. As of October 2026, only a physician-owned professional medical corporation may practice medicine as an entity.

For a non-physician founder, the bottom line is this: you can own the business, but you should not control clinical care. Most founders use a physician-owned professional medical corporation paired with a management company. An NP or PA founder cannot form a Louisiana professional medical corporation, and NPs practice under a collaborative agreement with a physician.

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

Key takeaways

The LSBME's December 2024 Statement of Position says physician employment by a non-medical corporation is not per se unlawful, but corporate control over a physician's medical judgment is treated as unauthorized practice.
Under La. R.S. 12:902, only natural persons licensed to practice medicine or podiatry in Louisiana may form a professional medical corporation.
La. R.S. 12:905 strips voting rights and earnings from any shareholder who is not a Louisiana-licensed physician or another professional medical corporation.
Louisiana bars health care providers from paying or receiving payment for patient referrals under La. R.S. 37:1745.
An out-of-state physician without a Louisiana license needs an LSBME telemedicine permit to treat Louisiana patients by telemedicine.

Does Louisiana have a corporate practice of medicine doctrine?

Yes, but its source is the medical board, not a dedicated statute. The LSBME's December 2024 Statement of Position on the corporate practice of medicine replaces an earlier Board statement on the subject. The Board lists its statements on its Statements of Position page.

The reasoning: the Medical Practice Act licenses individuals, so only a physician-owned professional medical corporation may practice medicine as an entity. But the 2024 statement does not ban corporate employment. The line is control. A corporate employer that controls the way a physician provides medical services, limits the physician's independent medical judgment, or inserts itself into the physician-patient relationship is, in the Board's words, engaging in the unauthorized practice of medicine. The statement is also reported to warn of legal exposure for the corporation and disciplinary exposure for the physicians involved; read the full statement, including any discussion of hospitals or management arrangements, before relying on it.

The disciplinary statute supports the same point. La. R.S. 37:1285 lists unprofessional conduct as grounds for discipline, and paragraph (A)(13) names "failing to maintain independent medical judgment" as one example.

We classify Louisiana as "Limited or unsettled." Employment is allowed. Control is not. Where that line falls in a given contract is a fact question that no Louisiana court or Attorney General opinion we located has defined in detail.

Who can own a medical practice in Louisiana?

Louisiana has a dedicated vehicle for physician practices: the professional medical corporation, governed by Chapter 9 of Title 12.

Formation. Under La. R.S. 12:902, one or more natural persons of full age who are licensed to practice medicine or podiatry in Louisiana may form a corporation to practice medicine or podiatry.
Single purpose. Under La. R.S. 12:904, a professional medical corporation may engage in no business other than the practice of medicine or podiatry, though it may hold property for investment or for its practice.
One class of stock, physician control. Under La. R.S. 12:905, the corporation may issue only common shares. Only a Louisiana-licensed physician holding shares in their own right, or another professional medical corporation, may vote those shares and share in earnings. The section is also reported to limit other shareholders' access to records about medical services and to address share transfers and disqualification; confirm the full current text.

That rule is unusual. By stripping the vote and earnings from non-physician shares, Louisiana removes their economic and governance value, so a non-physician should not expect to hold a meaningful stake in the clinical entity.

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

Louisiana is a reduced-practice state for nurse practitioners. An advanced practice registered nurse who diagnoses or prescribes must practice under a collaborative practice agreement with one or more physicians. La. R.S. 37:913 defines that agreement as a formal written statement of the practice parameters the APRN and physician agree on. The Louisiana State Board of Nursing and LSBME rules set its required contents.

Physician assistants practice under a physician relationship governed by LSBME rules. Louisiana law has required a written agreement between the PA and physician; confirm the current requirements with the LSBME. Legislators have proposed moving PA language from "supervision" to "collaboration," so check the current wording before you build PA staffing models.

On ownership: neither NPs nor PAs can form a Louisiana professional medical corporation, because R.S. 12:902 limits formation to physicians and podiatrists. An NP- or PA-founded company that wants to offer physician services generally needs a physician-owned medical corporation for that clinical work. If you are building an APRN-led model, you will also need a collaborating physician. See our collaborating physician guide.

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

The friendly PC-MSO model fits Louisiana's framework well, because the Board allows corporate involvement but not clinical control. A Louisiana-licensed physician owns the professional medical corporation. A founder-owned MSO signs a management services agreement to run technology, billing, marketing, and operations. The medical corporation employs the clinicians and owns the clinical decisions.

Three Louisiana-specific points matter when drafting the agreement:

Referral payments. La. R.S. 37:1745 bars a health care provider from offering, making, soliciting, or receiving any payment, directly or indirectly, for referring or soliciting patients. Returns on investment based on a percentage of ownership are excluded. Avoid management fees tied to patient volume from referrals.
Financial interest disclosure. La. R.S. 37:1744 requires referring providers to disclose significant financial interests in the provider they refer to.
Clinical control. Given the Board's 2024 statement, keep protocols, prescribing, staffing of clinical roles, and medical records under the medical corporation's control. An MSO that sets treatment rules is the clearest risk.

We did not find a Louisiana statute that expressly bans percentage-based management fees. Many advisors still prefer a flat or cost-plus fee set at fair market value. Our management services agreement guide walks through the terms.

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

Louisiana treats medicine as practiced where the patient is. A physician who treats a Louisiana patient by telemedicine must hold an unrestricted Louisiana license or an LSBME telemedicine permit. The governing sources are Louisiana's telemedicine statute and LSBME rules; confirm the current text.

The LSBME telemedicine permit is reported to be narrow. As summarized from the Board's materials, permit holders may not open an office in Louisiana or meet patients in person there, the application asks about arrangements with Louisiana-based physicians for referrals and follow-up care, and some services may require a full license. Confirm the current permit conditions and renewal cycle with the LSBME before relying on them.

The permit does not change the ownership question. Louisiana's CPOM rules follow the patient, wherever your company is based. A practical national structure is a physician-owned medical corporation whose owner holds a Louisiana license, under an MSO agreement, with NPs holding Louisiana APRN licenses and collaborative agreements. For multi-state planning, see our telehealth licensing by state guide and the 50-state CPOM guide.

Louisiana CPOM at a glance

Topic	Louisiana (as of October 2026)
CPOM enforcement	Limited or unsettled: corporate employment allowed, corporate control of clinical judgment prohibited
Primary legal basis	LSBME Statement of Position (December 2024); Medical Practice Act; La. R.S. 12:901 et seq.
Professional entity options	Professional medical corporation owned by Louisiana-licensed physicians (R.S. 12:902)
Fee-splitting rule	R.S. 37:1745 bars payments for patient referrals; no express percentage-fee ban located
NP practice authority	Reduced (collaborative practice agreement required)
Out-of-state telehealth licensing	Yes: LSBME telemedicine permit, or full license
Typical structure for non-physician founders	Physician-owned professional medical corporation plus MSO under a management services agreement

Frequently asked questions

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

A non-physician can own the business side, such as an MSO, but not a voting or earnings stake in a professional medical corporation. Under La. R.S. 12:905, shareholders who are not Louisiana-licensed physicians have no vote and no share of earnings. The LSBME also says corporations other than professional medical corporations may not practice medicine.

Can a Louisiana corporation employ physicians?

Yes. The LSBME's December 2024 Statement of Position says employment by a non-medical corporation is not per se unlawful. The corporation must not control how the physician provides care or interfere in the physician-patient relationship.

Do out-of-state telehealth physicians need a Louisiana license?

They need either an unrestricted Louisiana license or an LSBME telemedicine permit. The permit is reported to carry conditions, such as limits on opening an office or seeing patients in person in Louisiana; confirm the current conditions with the LSBME.

Can a nurse practitioner open a practice in Louisiana?

Louisiana NPs who diagnose or prescribe must work under a collaborative practice agreement with a physician. NPs cannot form a professional medical corporation, which is limited to physicians and podiatrists.

Are percentage-based MSO fees allowed in Louisiana?

We found no Louisiana statute that expressly bans them. Louisiana does bar payments for patient referrals under R.S. 37:1745, so fees should not vary with referrals. A Louisiana health attorney should review the fee structure.

Sources

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