--- title: "Michigan Corporate Practice of Medicine Rules (2026 Guide)" description: "Michigan corporate practice of medicine: Attorney General opinions, licensed-only PCs and PLLCs, PA co-ownership rules, and the MSMS push on MSOs." slug: michigan-corporate-practice-of-medicine date: 2026-10-18 updated: 2026-10-18 author: MyOrbitHealth Compliance Team category: Compliance cpom: Strong --- # Corporate Practice of Medicine in Michigan: What Telehealth and Clinic Founders Need to Know Michigan enforces a strong corporate practice of medicine (CPOM) rule. It comes from decades of Attorney General opinions holding that a business corporation cannot practice a learned profession, backed by entity statutes that require every owner of a medical PC or PLLC to be licensed. Nonprofit corporations are the main exception. As of October 2026, a non-physician founder in Michigan needs a friendly PC-MSO structure, and should build it carefully: the Michigan State Medical Society has asked the Attorney General to investigate MSO arrangements where the physician owner is an owner in name only. NP founders face a restricted environment, since NPs still need physician delegation to prescribe controlled substances. PAs work under practice agreements and can co-own a practice entity, but only with the physicians they practice with. This is general information, not legal advice. Confirm the current rules with a healthcare attorney licensed in Michigan. *Last reviewed October 2026. State rules change often; statute and case references are summaries, not quotations.* ## Key takeaways - Michigan Attorney General Opinion No. 6592 (1989) concluded that a corporation formed under the Business Corporation Act may not engage in activities that only a learned profession may perform. - Attorney General Opinion No. 6770 (1993) concluded that nonprofit hospitals and nonprofit corporations may employ physicians if their purposes are lawful and no one profits personally. - Michigan's Professional Service Corporation Act and the professional LLC provisions of the Michigan Limited Liability Company Act require the owners of a medical entity to be licensed to provide its services. - Since 2017, Michigan PAs practice under a practice agreement with a participating physician, and a PA who co-owns a practice entity must do so alongside the physicians who are parties to that agreement. - In October 2023 the Michigan State Medical Society asked the Attorney General to investigate MSO structures it views as "physician in name only" ownership. ## Does Michigan have a corporate practice of medicine doctrine? Yes. Michigan's doctrine is built mostly on Attorney General opinions, which is unusual. - A 1956 opinion concluded that medicine was not a lawful purpose for a corporation formed under the business corporation statute of the time. - [Opinion No. 6592 (1989)](https://www.ag.state.mi.us/opinion/datafiles/1980s/op06592.htm) concluded that a corporation formed under the Business Corporation Act may not engage in activities that may be performed only by members of the learned professions. - Opinion No. 6770 (1993) carved out nonprofits. Nonprofit hospitals and corporations formed under the Nonprofit Corporation Act may employ physicians if their purposes are lawful and no pecuniary gain goes to officers, directors or members. The [State Bar of Michigan Health Care Law Section's paper on corporate practice](https://higherlogicdownload.s3.amazonaws.com/MICHBAR/f8a8a213-d7d6-49c4-bdff-e6c7a728e471/UploadedImages/pdfs/CorporatePractice.pdf) walks through this history and the reasoning behind it. The pressure point today is the MSO. In an [October 23, 2023 letter to Attorney General Dana Nessel](https://www.msms.org/Portals/0/Documents/MSMS/Advocacy/CPOM_AG%20Letter_Oct%202023.pdf?ver=2023-11-16-040457-967×tamp=1700107521393), the Michigan State Medical Society described arrangements where an MSO controls a PC or PLLC whose physician owner is so restricted that the physician has no real direction or control. [Varnum reported](https://www.varnumlaw.com/insights/under-the-regulatory-microscope-private-investment-in-health-care-related-entities/) that the Attorney General's office said it was reviewing the allegations and deciding whether and how to proceed. We found no public outcome as of October 2026. ## Who can own a medical practice in Michigan? Licensed professionals. Michigan offers two vehicles: - **Professional corporation.** The Professional Service Corporation Act (1962) requires each shareholder to be licensed to render the service the corporation was formed for. Allopathic physicians, osteopathic physicians and podiatrists can incorporate together. - **Professional LLC.** Under [MCL 450.4904](https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-450-4904), a PLLC rendering a service regulated by the Public Health Code must have members and managers who are licensed or legally authorized in Michigan to provide that service. The section has specific rules for physicians forming PLLCs with PAs, and PAs cannot form a PLLC made up only of PAs. Michigan has expanded multidisciplinary options in recent years. For example, [statutory changes now allow chiropractors to join multidisciplinary entities with physicians](https://www.wachler.com/articles/2023-articles-by-wachler-associates-pc/recent-updates-to-michigans-business-entities-laws-allow-chiropr/). None of these changes lets a lay investor hold equity. ## Can nurse practitioners and physician assistants own a practice in Michigan? **Nurse practitioners.** Michigan is a restricted practice state. NPs work under a delegation model that requires physician involvement for key functions, including prescribing controlled substances. Bills to loosen this, including House Bill 4399 and Senate Bill 268, had not become law in the materials we reviewed. Check the Michigan Legislature for their current status. NP ownership of a medical professional entity is not a clear path, so an NP-founded brand should plan on a physician-owned entity or a [collaborating physician](/blog/collaborating-physician) arrangement. **Physician assistants.** [2016 Public Act 379](https://www.legislature.mi.gov/documents/2015-2016/publicact/pdf/2016-PA-0379.pdf), effective March 2017, replaced PA supervision and delegation with a practice agreement. Under [MCL 333.17047](https://legislature.mi.gov/Laws/MCL?objectName=MCL-333-17047), a PA may practice only under a compliant practice agreement with a participating physician. When PAs and physicians form an entity together, the physicians who are parties to the PA's practice agreement must be co-owners of the same professional corporation or PLLC. A 2026 bill would let experienced PAs practice without a physician agreement. Confirm whether it advanced. ## How does the friendly PC-MSO model work in Michigan? The [friendly PC-MSO model](/blog/friendly-pc-mso-model) still works in Michigan: a Michigan-licensed physician owns the PC or PLLC, and your company's MSO provides non-clinical services under a management services agreement. Clinical decisions stay with licensed providers. The MSMS letter shows what to avoid. Michigan's medical society is targeting arrangements where stock transfer restrictions, management control and economic terms leave the physician owner without real authority. Design for the opposite: - The physician owner controls clinical policy, hiring of clinicians and medical records. - Stock transfer restrictions protect the MSO's investment without stripping the owner of decision-making. - The management fee reflects fair market value for documented services. **Fee splitting.** Under [MCL 333.16221](https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-333-16221), dividing fees for patient referrals or accepting kickbacks is an unethical business practice that can lead to discipline. The same section has the disciplinary subcommittee apply the federal Stark self-referral rules regardless of who pays. Michigan's Penal Code separately reaches some fee-dividing by physicians. We found no Michigan authority squarely addressing percentage-based MSO fees, so a flat or cost-plus fee is the more defensible choice. See our [management services agreement guide](/blog/management-services-agreement-guide). ## What does this mean for a telehealth brand serving Michigan patients? CPOM follows the patient. If your clinicians treat people located in Michigan, Michigan's rules apply wherever your company is based. Michigan has no out-of-state telehealth registration. Every physician, NP and PA treating Michigan patients needs a Michigan license. Our [telehealth licensing by state guide](/blog/telehealth-licensing-by-state) compares the options. A practical setup: a physician-owned Michigan PC or PLLC, NPs working under delegation and PAs under practice agreements inside it, and a flat-fee MSA with real physician control. For neighbors, see our [Indiana guide](/blog/indiana-corporate-practice-of-medicine). ## Michigan CPOM at a glance | Topic | Michigan (as of October 2026) | |---|---| | CPOM enforcement | Strong: business corporations may not practice medicine; nonprofit exception | | Primary legal basis | Attorney General opinions (No. 6592, 1989; No. 6770, 1993); Professional Service Corporation Act; MCL 450.4904 | | Professional entity options | Professional corporation or PLLC owned by licensees; physician-PA entities allowed | | Fee-splitting rule | MCL 333.16221 bars dividing fees for referrals; Stark rules applied regardless of payer | | NP practice authority | Restricted: delegation required for controlled substances | | Out-of-state telehealth licensing | No special registration; full Michigan license required | | Typical structure for non-physician founders | Physician-owned PC or PLLC plus lay-owned MSO, with genuine physician control | ## Frequently asked questions ### Can a non-physician own a medical practice in Michigan? Not directly. Michigan Attorney General opinions bar business corporations from practicing medicine, and medical PCs and PLLCs must be owned by licensees. A non-physician can own the MSO that manages a physician-owned practice. ### Can a nonprofit employ physicians in Michigan? Yes. Attorney General Opinion No. 6770 (1993) concluded that nonprofit hospitals and nonprofit corporations may employ physicians if their purposes are lawful and no one profits personally. ### Is the MSO model under scrutiny in Michigan? Yes. In October 2023 the Michigan State Medical Society asked the Attorney General to investigate MSO structures where the physician owner has no real control. Give the physician owner genuine clinical and governance authority. ### Can a physician assistant co-own a practice in Michigan? Yes, with physicians. A PA may hold an interest in a PC or PLLC, and the physicians who are parties to the PA's practice agreement must be owners of the same entity. ### Can out-of-state clinicians treat Michigan patients by telehealth? Only with a Michigan license. Michigan has no out-of-state telehealth registration, so plan on full licensure for each physician, NP and PA. ## Sources - [Michigan Attorney General Opinion No. 6592 (1989)](https://www.ag.state.mi.us/opinion/datafiles/1980s/op06592.htm) - [State Bar of Michigan Health Care Law Section, Corporate Practice of Medicine in Michigan](https://higherlogicdownload.s3.amazonaws.com/MICHBAR/f8a8a213-d7d6-49c4-bdff-e6c7a728e471/UploadedImages/pdfs/CorporatePractice.pdf) - [MCL 450.4904, Professional limited liability companies](https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-450-4904) - [MCL 333.17047, Physician assistant practice agreements](https://legislature.mi.gov/Laws/MCL?objectName=MCL-333-17047) - [MCL 333.16221, Grounds for discipline](https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-333-16221) - [Michigan State Medical Society letter to Attorney General Nessel (Oct. 23, 2023)](https://www.msms.org/Portals/0/Documents/MSMS/Advocacy/CPOM_AG%20Letter_Oct%202023.pdf?ver=2023-11-16-040457-967×tamp=1700107521393) - [Varnum, Under the Regulatory Microscope: Private Investment in Health Care-Related Entities](https://www.varnumlaw.com/insights/under-the-regulatory-microscope-private-investment-in-health-care-related-entities/) For every other state, start with our [corporate practice of medicine 50-state guide](/blog/corporate-practice-of-medicine-50-state-guide). ## Launch in Michigan 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 making every clinical decision. Explore [PC-MSO formation](/pc-mso-formation) and [physician PC owner services](/physician-pc-owner), or [book a call](https://myorbithealth.com/book). ```html ```