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Pennsylvania Limits Multidisciplinary Ownership For Certain Health Care Providers

The Pennsylvania legislature has enacted amendments to the Partnership Code (Title 15 Pa.C.S.A. Part III) that identify acceptable forms of organization for certain licensed health care professions, including medicine and surgery, chiropractic, and dentistry. Act 170 of 2016 states that except as otherwise provided in either law or regulation applicable to a particular profession, all partners or members of a general or limited partnership, or limited liability company, must be persons licensed in the profession the entity practices, if the entity renders any of the following professional health care services: chiropractic, dentistry, medicine and surgery, optometry, osteopathic medicine and surgery, podiatric medicine, or psychology.  Thus, except where the rules of a licensing body allow multi-disciplinary ownership, if a Pennsylvania GP, LP, LLP, or LLC provides any of these professional services to patients, the ultimate beneficial owners of such entities must all be licensees of that specific specialty.

These amendments are the latest in an attempt by the state to identify who may own and benefit from professional services.  As the health care field adapts in response to factors such as group practice and facility consolidations, as well as declining reimbursement rates, state licensing bodies have, and continue to consider, new rules on ownership, including the extent to which multi-disciplinary practices are permissible.  In situations where a particular licensing body is considering or has proposed (but not yet adopted) such rules, there may be a policy to defer all corporate practice questions to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations, in light of Act 170.

Thus, until state licensing bodies adopt rules on ownership of professional practices, these amendments signal a shift toward regulation and enforcement by the Bureau of Corporations and Charitable Organizations.

If you have any questions about this post or any related matters, please contact me at plehr@nmmlaw.com.