New York Corporate Practice of Medicine Rules (2026 Guide)

New York enforces a strong corporate practice of medicine (CPOM) ban, and its sharpest edge is money. Education Law section 6522 lets only licensed individuals practice medicine, and only licensed physicians may own a medical professional corporation or PLLC. What sets New York apart is Education Law section 6530(19). It makes it professional misconduct for a physician to share professional fees with non-licensees, and it is read to reach space, equipment, and staffing deals paid as a percentage of practice income. Many MSO fee models that are routine elsewhere do not work here.

For a non-physician founder, the answer is a physician-owned PC or PLLC plus an MSO you own, paid a fixed fair-market-value fee. NPs with more than 3,600 hours can practice without a written practice agreement, but neither NPs nor PAs can generally own a medical PC.

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

Key takeaways

New York Education Law section 6522 limits the practice of medicine to licensed persons, and section 6512 makes unlicensed practice, and knowingly aiding it, a crime.
Only New York-licensed physicians may own shares of a medical professional service corporation, and the State Education Department says business corporations cannot employ licensees to provide professional services.
Education Law section 6530(19) is read to make it misconduct for payment for space, facilities, equipment, or personnel services to be a percentage of, or dependent on, practice income.
Public Health Law Article 45-A requires advance notice to the Department of Health of certain material transactions, and DOH guidance has been described as treating some MSO arrangements as covered; confirm current timing and thresholds.
New York has no telehealth registration and is not in the Interstate Medical Licensure Compact, so physicians treating New York patients need a full New York license.

Does New York have a corporate practice of medicine doctrine?

Yes, built on the Education Law and enforced through licensing, criminal law, and insurance litigation.

Licensure and unauthorized practice. Education Law section 6522 provides that only a licensed or otherwise authorized person may practice medicine. Section 6512 makes unauthorized practice a crime and extends it to anyone who knowingly aids or abets it. That clause makes the lay owner a target, not just the doctors.

The State Education Department's position. The Office of the Professions says business corporations may not hire licensees to provide professional services, because the law neither authorizes it nor provides an exemption. They may provide management services such as scheduling, billing, and clerical staffing, with a clear line between the professional and the manager.

Insurance enforcement. New York court decisions, including at the Court of Appeals level, are commonly described as allowing no-fault auto insurers to refuse payment to medical PCs that are nominally physician-owned but actually controlled by non-physicians. As described, de facto lay control, shown through money flows and decision-making, can make a PC ineligible for payment. Have counsel confirm the current case law. In New York, the party most likely to challenge your structure may be a payer, not the regulator.

Who can own a medical practice in New York?

Professional service corporations (PCs). Under Business Corporation Law Article 15, section 1507 generally limits a professional service corporation's shares to individuals authorized to practice in New York the profession the corporation practices. For a medical PC, that means New York-licensed physicians. Unlike California, New York generally does not let other licensees take minority stakes in a medical PC.

PLLCs. Physicians may also form a professional service limited liability company under the Limited Liability Company Law, generally with the same rule: members must be licensed in the profession. Confirm the governing provision with counsel. A standard LLC cannot provide medical services.

Facility licensure. Clinics operating as health facilities rather than private practices generally need Department of Health establishment approval under Public Health Law Article 28; confirm whether your model triggers it. It is rarely the fast route for a startup.

Can nurse practitioners and physician assistants own a practice in New York?

New York NP practice authority is classified as full, with a New York-specific catch.

Nurse practitioners. Under the Nurse Practitioner Modernization Act, tracked by the Nurse Practitioner Association of New York State, NPs with more than 3,600 hours of practice do not need a written practice agreement with a physician. Sources disagree on whether they must still keep a documented collaborative relationship with a physician or hospital, so confirm before relying on it. The provision has been extended by sunset dates rather than made permanent; confirm the current sunset date. Newer NPs still need a written practice agreement with a collaborating physician.

Full practice authority lets an NP run an NP practice. It does not let an NP own a medical PC or employ physicians. See our collaborating physician guide.

Physician assistants. New York PAs practice under physician supervision and are not licensed to practice medicine, so they generally cannot hold shares in a medical PC under section 1507; confirm with counsel. A PA founder follows the lay-founder playbook: own the MSO, partner with a physician owner.

How does the friendly PC-MSO model work in New York?

The friendly PC-MSO model works in New York. Fee design is where most structures fail.

Fee-splitting. Education Law section 6530(19) makes it misconduct to let others share in professional fees, with limited exceptions for licensed professional colleagues and similar arrangements. It is read to cover payment for space, facilities, equipment, or personnel services that is a percentage of, or dependent on, practice income. The Department of Health enforces it through physician misconduct proceedings.

Percentage fees. According to a 2017 New York Health Law Blog post, the Department of Health has treated paying a billing company a percentage of fees billed or collected as improper fee-splitting; confirm DOH's current position. Bills such as S5875 in 2019 would have allowed percentage billing and management fees; check whether it or a similar bill was enacted. Our working assumption: no percentage-of-revenue management fees in New York.

What a New York management services agreement looks like.

A fixed or cost-plus fee set at fair market value and reset on a schedule, not on collections.
Revenue deposited to the PC's own account, with no automatic sweep.
No MSO control over clinician hiring, clinical protocols, or records.
No stock pledges or proxies giving the MSO effective control, which is what no-fault insurers look for.

Material transactions. Public Health Law Article 45-A requires advance notice to the Department of Health before closing a material transaction above a revenue threshold. DOH guidance has been described as saying that transferring control through a management services agreement can count as an acquisition. Confirm the current notice period, threshold, and DOH guidance with counsel.

What does this mean for a telehealth brand serving New York patients?

CPOM follows the patient. If the patient is in New York during the visit, New York rules apply.

Licensure. Every physician treating New York patients needs a full New York license. Education Law section 6526's exceptions, such as occasional consultation with a New York physician, are narrow. See telehealth licensing by state.
Entity. Run New York care through a PC or PLLC owned by New York-licensed physicians.
Fees. If your national MSA uses a percentage fee, carve out a New York schedule with a fixed fair-market-value fee.
NP-led care. Experienced NPs (3,600+ hours) can treat New York patients without a written practice agreement while the NP Modernization Act provision remains in effect, even though ownership still sits with physicians.

New York CPOM at a glance

Topic	New York (as of October 2026)
CPOM enforcement	Strong
Primary legal basis	Education Law 6522 and 6512; State Education Department position; no-fault insurance case law
Professional entity options	Medical PC (BCL Article 15) or PLLC; physician owners only
Fee-splitting rule	Education Law 6530(19); percentage-of-income space, equipment, and staffing fees are treated as misconduct
NP practice authority	Full (3,600+ hours; NP Modernization Act extended by sunset)
Out-of-state telehealth licensing	No; full New York license required
Typical structure for non-physician founders	Physician-owned PC/PLLC plus MSO on a fixed FMV fee; Article 45-A notice for material transactions

Frequently asked questions

Can a non-physician own a medical practice in New York?

No. Shares of a New York medical PC can be issued only to New York-licensed physicians, and PLLC members must also be licensed. Non-physicians usually own an MSO serving a physician-owned PC.

Can an MSO charge a percentage of revenue in New York?

It is high risk and generally avoided. Education Law section 6530(19) is read to treat payment for space, equipment, or staffing that depends on practice income as misconduct, and DOH has reportedly treated percentage billing fees as fee-splitting. A fixed fair-market-value fee is standard.

Can a nurse practitioner own a practice in New York?

An NP can generally own an NP practice (confirm the entity form with counsel), and NPs with more than 3,600 hours can practice without a written practice agreement. An NP cannot own a medical PC. Check the NP Modernization Act's current sunset date before relying on it.

Does New York's material transaction law apply to MSO deals?

It can. Article 45-A requires advance notice to the Department of Health of certain material transactions, and DOH guidance has been described as saying that transferring control through a management services agreement can count as an acquisition. Confirm the current rules with counsel.

Do out-of-state doctors need a New York license for telehealth?

Yes, in almost all cases. New York has no telehealth registration, is not in the Interstate Medical Licensure Compact, and allows only narrow exceptions such as occasional consultations with New York physicians.

Sources

For every other state, see our 50-state corporate practice of medicine guide.

Launch in New York 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, where licensed providers make every clinical decision. See PC-MSO formation and physician PC owner services, or book a call.