Can a Non-Physician Own an Urgent Care? Ownership Rules
Can a non-physician own an urgent care? It is one of the first questions entrepreneurs, investors, nurse practitioners and other clinicians ask before they open or buy a center. The short answer is that it depends on the state, the services offered and how the business is structured.
Some states allow lay ownership of medical businesses with few restrictions. Others limit who may own an entity that provides physician services, which can require a different structure. Because the answer shapes how a deal is organized and financed, it should be settled with healthcare counsel before you sign a lease or purchase agreement. This article explains the general concepts and how lenders view them. Ownership rules vary by state, and nothing here is legal, tax, billing or compliance advice.
Why Ownership Rules Exist
Many states have rules, often described as the corporate practice of medicine doctrine, intended to keep medical judgment in the hands of licensed professionals rather than business owners. Where these rules apply, an entity owned by non-physicians may be restricted from employing physicians or billing for physician services directly.
The rules are not uniform. States differ on whether they apply at all, how strictly they are enforced, which professions they cover and what exceptions exist. Separate rules may also apply to advanced practice providers, facility licensing and fee-splitting arrangements.
Structures That May Let a Non-Physician Own an Urgent Care
When a non-physician wants to own an urgent care in a state with ownership restrictions, counsel may recommend one of several approaches. Each must be designed and documented by healthcare counsel to fit state law.
- Management services arrangement: a physician-owned professional entity provides clinical services, while a separate management company owned by the investor provides space, staff, equipment, billing support and administrative services under a management agreement
- Physician partnership: a licensed physician holds the ownership interest required by state law, with the non-physician owning a permitted share or a related entity
- Direct ownership: in states without these restrictions, a non-physician may be able to own the operating entity and employ providers directly
Management fees, control provisions and the relationship between the entities can raise regulatory questions, including fee-splitting and referral issues. Those questions belong with healthcare counsel and qualified compliance professionals.
Nurse Practitioners and Other Clinicians
Nurse practitioners, physician assistants and other licensed clinicians face their own set of rules. In some states, nurse practitioners have broad practice authority and may be able to open and own a clinic. In others, collaboration or supervision requirements apply, and ownership may still be limited. Our article on whether a nurse practitioner can open an urgent care covers this question in more detail.
How Lenders View Non-Physician Ownership
Lenders do not decide whether a structure is legal, but they will look closely at it. When an investor or other non-physician owns the center, a lender may want to understand:
- Who the borrower is: the operating entity, the management company or both
- Where cash flow sits: whether revenue flows to the borrower directly or through management fees
- Stability of the arrangement: the term of the management agreement, termination rights and what happens if the physician owner leaves
- Collateral and guarantees: which entity owns equipment, leases and receivables, and who signs guarantees
- Legal review: whether healthcare counsel has structured and documented the arrangement
- Clinical leadership: the experience of the medical director and providers
A clear, well-documented structure can make it easier for a lender to evaluate the project. An unclear one can delay or stop financing. Our guide to urgent care loan requirements explains what else lenders review.
SBA Considerations
SBA 7(a) loans may be available to some investor-owned urgent care projects, but program rules on ownership, guarantees and affiliated entities apply. When more than one entity is involved, the lender will review how they relate and who must guarantee the loan. Eligibility and terms depend on the business, the owners, use of proceeds, program rules and lender review, and every loan is subject to approval.
Buying an Existing Center as a Non-Physician
If you plan to buy rather than build, ownership questions affect the deal structure. The existing center may already use a physician-owned entity or a management arrangement. Buyers should not assume that an existing structure, its payer contracts or its enrollments will continue unchanged after a sale. See our guide on how to buy an urgent care for the broader process.
Starting a New Center as a Non-Physician
For a new center, settle the structure before you apply for financing, sign a lease or begin credentialing. Payer contracts and enrollments are tied to specific entities and providers, so changing the structure later can be disruptive. Our guide to urgent care startup financing covers the rest of the funding plan.
Questions to Bring to Counsel
- Does our state restrict non-physician ownership of medical businesses?
- Which services in our plan, such as imaging or lab, carry additional licensing rules?
- What structure fits our goals and complies with state law?
- How should management fees and control provisions be set?
- What happens if the physician owner or medical director leaves?
Final Thoughts
Can a non-physician own an urgent care? There is no single national answer. State law, the services offered and the structure chosen all matter. Working with healthcare counsel first, then presenting a clear structure to lenders, can help investors and non-physician clinicians move forward with fewer surprises.
US Medical Funding helps physicians, clinicians and investors finance urgent care start-ups and acquisitions. Learn more about our urgent care acquisition financing and our full range of urgent care practice financing options.
