Where Can Physician Assistants Own a Practice? A PA Business Formation Guide

Why This Matters

The PA Burnout Crisis and the Need for Independence

Many Physician Assistants (PAs) are burned out from traditional employment settings, whether due to low autonomy, high patient loads, administrative burdens, or stagnant salaries. More PAs are looking for independent options, whether by starting their own practice or shifting to a 1099 contractor model. However, many PAs don’t realize they have options to own a practice or co-own a business under the right structure—especially in states that favor PA independence.

This guide breaks down the best states for PAs to open a legally compliant practice, along with key business formation rules, CPOM restrictions, regulatory nuances, and common mistakes to avoid. Each section includes:

• Overview of key PA ownership laws in the state
  
• Recommended business structure (LLC, PLLC, PC, PA Corporation, etc.)
  
• Collaboration or supervision requirements
  
• Key regulatory nuances and legal restrictions (CPOM laws, prescribing rules, insurance credentialing requirements, etc.)
  
• Mistakes others have made and what to watch out for
  
• Timeline to form and start operating a PA-owned practice
  
• Links to official state business formation resources
  
  

PA-Owned Practices: The Corporate Practice of Medicine (CPOM) Factor

The biggest legal barrier to PA practice ownership is the Corporate Practice of Medicine (CPOM) doctrine, which restricts non-physicians from owning or operating medical practices in many states. However, some states make exceptions for PAs by allowing them to:

✅ Form Physician Assistant Corporations (PA Corps)
✅ Own Professional Limited Liability Companies (PLLCs) or Professional Corporations (PCs) with physician co-owners
✅ Operate independent LLCs in states with minimal CPOM restrictions
✅ Work 1099 as independent contractors within certain limitations

The 10 Best States for PAs to Own a Practice

The following states are considered the easiest for PAs to own or co-own a practice, based on their business formation rules, collaboration agreements, and CPOM limitations.

1. California – Two Legal Perspectives on PA Ownership in California

Traditional View: CPOM Doctrine Prohibits PA Ownership

• Historically, California law prohibited non-physicians (including PAs and NPs) from owning medical practices due to Business and Professions Code § 2400, which prevents the corporate practice of medicine (CPOM).
  
• PAs cannot own a traditional medical practice but can own a share in a Professional Medical Corporation (PMC), as long as a physician owns at least 51%.
  
• This restriction exists to ensure medical decision-making remains under the control of physicians, not business owners or administrators.
  
• The Medical Board of California has reinforced that medical corporations must be owned by physicians, with non-physicians only able to act in administrative or support roles.
  
  

Modern Interpretation: PAs Can Own Their Own PA Professional Corporation (PAC)

• Recent legal interpretations and business models show that PAs can establish a Physician Assistant Corporation (PAC).
  
• A PA-owned PAC can hire a physician collaborator through an employment or contractor agreement, meaning that the PA can effectively operate a practice while complying with CPOM laws.
  
• The PA PAC can only offer services that PAs are legally permitted to perform. A collaborating physician is still required for supervision, but the ownership and business control remain with the PA.

California allows two primary business models that enable PAs to operate practices:

1. Professional Corporations (PC) for PAs
   
   • PAs can form a Physician Assistant Corporation (PAC) under California Business and Professions Code § 13401.5.
   • PACs can legally hire a collaborating physician under a standard contract.
2. Physician-Owned Professional Medical Corporation (PMC)
   
   • PAs can own up to 49% of a Professional Medical Corporation (PMC).
   • The majority ownership (51%) must be held by a licensed physician.
   • This allows a PA to be an active co-owner but still requires physician control over medical decisions.

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2. Texas – PC or PLLC with Physician Ownership Required

✅ Recommended Business Structure: Professional Corporation (PC) or Professional Limited Liability Company (PLLC)
✅ Physician Ownership Requirement: At least 51% of the business must be physician-owned (Texas Occupations Code § 162.0021)
✅ Supervision Requirements: Prescriptive delegation agreement required for Schedule II drugs (Texas Occupations Code § 157.051-157.054)
✅ Timeline to Start: 4–8 weeks for registration, 2–4 months for full credentialing

Key Considerations for Texas PAs:

• You cannot fully own a medical practice as a PA – a physician must hold at least 51% ownership.
  
• Form a PLLC or PC if working with a physician to stay compliant with CPOM laws.
  
• Credentialing and payer enrollment take time – expect a minimum of 2 months to start taking insurance payments.
  
• Medicare requires "incident-to" billing for full reimbursement under a physician’s NPI.
  
  

📌 Texas Secretary of State Business Registration: sos.state.tx.us
📌 Texas Medical Board: tmb.state.tx.us

3. Arizona – PA-Owned LLCs Allowed, No CPOM Issues

✅ Recommended Business Structure: Limited Liability Company (LLC) or Professional Limited Liability Company (PLLC)
✅ Physician Ownership Requirement: None – PAs can own 100% of their practice (Arizona Revised Statutes § 32-2523)
✅ Supervision Requirements: None required for general practice, but physician collaboration recommended for controlled substances
✅ Timeline to Start: 2–4 weeks for business registration, 1–2 months for credentialing

Key Considerations for Arizona PAs:

• PAs can fully own a practice without physician oversight.
  
• If prescribing controlled substances, a collaborating physician must be involved.
  
• Arizona has no strict CPOM laws, making it one of the easiest states for PA ownership.
  
• Forming an LLC is simple and recommended for liability protection.
  
  

📌 Arizona Corporation Commission Business Registration: ecorp.azcc.gov
📌 Arizona Regulatory Board of Physician Assistants: pa.az.gov

4. Washington – PA-Owned PLLCs Allowed, Minimal Restrictions

✅ Recommended Business Structure: Professional Limited Liability Company (PLLC)
✅ Physician Ownership Requirement: None – PAs can fully own a PLLC (RCW 18.71A.020)
✅ Supervision Requirements: Collaboration required for prescriptive authority but not for general practice
✅ Timeline to Start: 3–6 weeks for business registration, 1–2 months for insurance credentialing

Key Considerations for Washington PAs:

• PAs can own a PLLC without a physician co-owners
• If prescribing controlled substances, a collaboration agreement with a physician is required.
  
• Insurance credentialing is relatively fast compared to other states.
  
  

📌 Washington Secretary of State Business Formation: sos.wa.gov
📌 Washington Medical Commission: wmc.wa.gov

5. Illinois – PA-Owned PLLCs Allowed with Collaboration Agreement

✅ Recommended Business Structure: Professional Limited Liability Company (PLLC) or Professional Corporation (PC)
✅ Physician Ownership Requirement: PAs can own a majority of a PLLC or PC, but a collaborative agreement with a physician is required (225 ILCS 60/49.5 – Illinois Medical Practice Act)
✅ Supervision Requirements: Collaboration agreement required, but direct supervision not mandatory
✅ Timeline to Start: 4–6 weeks for business formation, 2–4 months for full credentialing

Key Considerations for Illinois PAs:

• PAs can own a majority of a PLLC, but they must have a collaboration agreement with a physician.
  
• Supervision is not required, but prescription authority is limited without a formal agreement.
  
• CPOM laws require careful contract structuring to ensure compliance.
  
• Credentialing delays are common in Illinois, particularly with Medicaid and private payers.
  
  

📌 Illinois Secretary of State Business Registration: ilsos.gov
📌 Illinois Medical Licensing Board: idfpr.com

6. North Carolina – PA-Owned PLLCs Allowed, but Supervision Required

✅ Recommended Business Structure: Professional Limited Liability Company (PLLC) or Professional Corporation (PC)
✅ Physician Ownership Requirement: None – PAs can fully own a PLLC or PC, but supervision is required (North Carolina General Statutes § 90-18.1)
✅ Supervision Requirements: Physician must supervise PA practice activities, including chart review requirements
✅ Timeline to Start: 3–6 weeks for business formation, 2–3 months for credentialing

Key Considerations for North Carolina PAs:

• PAs can own and operate a PLLC independently, but a supervising physician must be involved
  
• Supervision rules vary by specialty – certain procedures require direct oversight
  
• Billing requires clear supervision documentation, especially for Medicare and Medicaid
  
• CPOM laws allow for PA-owned businesses but limit certain activities without physician oversight.
  
  

📌 North Carolina Secretary of State Business Registration: sosnc.gov
📌 North Carolina Medical Board: ncmedboard.org

7. Florida – PA-Owned LLCs Allowed, Supervision Required for Some Services

✅ Recommended Business Structure: Limited Liability Company (LLC) or Professional Corporation (PC)
✅ Physician Ownership Requirement: None – PAs can fully own a medical practice but must have physician supervision (Florida Statutes § 458.347)
✅ Supervision Requirements: Physician supervision required for certain procedures, especially controlled substances
✅ Timeline to Start: 3–5 weeks for business formation, 2–3 months for full credentialing

Key Considerations for Florida PAs:

• PAs can fully own an LLC, but a supervising physician must be designated for some services.
  
• Certain specialties (e.g., aesthetics, pain management) require stricter supervision.
  
• Florida has complex insurance credentialing rules, making it essential to plan in advance.
  
• Medicare billing can be restrictive if the PA is not under a formal employment contract.
  
  

📌 Florida Secretary of State Business Registration: dos.myflorida.com
📌 Florida Board of Medicine: floridasmedicalboard.gov

8. Colorado – PA-Owned LLCs Allowed, Minimal Supervision Required

✅ Recommended Business Structure: Limited Liability Company (LLC) or Professional Limited Liability Company (PLLC)
✅ Physician Ownership Requirement: None – PAs can fully own a practice without physician co-ownership (Colorado Revised Statutes § 12-240-110)
✅ Supervision Requirements: Collaboration required for controlled substances but not for general medical practice
✅ Timeline to Start: 2–4 weeks for business formation, 1–2 months for credentialing

Key Considerations for Colorado PAs:

• Colorado is one of the easiest states for PA-owned practices, as no physician ownership is required.
  
• Controlled substances require a collaborating physician, but general practice does not.
  
• Insurance credentialing in Colorado is relatively fast, making it easier for PAs to start billing quickly.
  
• No strict CPOM enforcement, but best practices include having clear business contracts.
  
  

📌 Colorado Secretary of State Business Registration: sos.state.co.us
📌 Colorado Medical Board: dora.colorado.gov

9. Nevada – PA-Owned LLCs Allowed, No Physician Oversight Required

✅ Recommended Business Structure: Limited Liability Company (LLC) or Professional Limited Liability Company (PLLC)
✅ Physician Ownership Requirement: None – PAs can own and operate a practice without a physician co-owner (Nevada Revised Statutes § 630.275)
✅ Supervision Requirements: Only required for controlled substances
✅ Timeline to Start: 3–6 weeks for business registration, 2–3 months for full credentialing**

Key Considerations for Nevada PAs:

• Nevada has some of the most PA-friendly ownership laws, allowing full practice ownership.
  
• Supervision is only required for Schedule II-V controlled substances.
  
• Medicaid and private payer credentialing can be time-consuming, so start early.
  
• Telemedicine regulations in Nevada are favorable for PAs looking to expand beyond in-person care.
  
  

📌 Nevada Secretary of State Business Registration: nvsos.gov
📌 Nevada Medical Board: medboard.nv.gov

10. Georgia – PA-Owned PLLCs Allowed, Collaboration Required

✅ Recommended Business Structure: Professional Limited Liability Company (PLLC) or Professional Corporation (PC)
✅ Physician Ownership Requirement: None – PAs can own a PLLC or PC, but a collaboration agreement is required (Georgia Code § 43-34-103)
✅ Supervision Requirements: Collaboration agreement required for all clinical activities
✅ Timeline to Start: 3–6 weeks for business formation, 2–4 months for full credentialing

Key Considerations for Georgia PAs:

• PAs can fully own a PLLC but must maintain a collaboration agreement with a physician.
  
• Georgia requires specific documentation for supervision, including prescribing authority agreements.
  
• Insurance credentialing in Georgia can take longer than in other states.
  
• Strict record-keeping requirements for collaboration agreements must be followed.
  
  

📌 Georgia Secretary of State Business Registration: sos.ga.gov
📌 Georgia Composite Medical Board: medicalboard.georgia.gov

The Hardest States for PAs to Own a Practice

Avoid These States or Proceed with Caution

While we’ve covered the best states for PAs to start their own practice, there are some states where ownership is nearly impossible or highly restrictive due to corporate practice of medicine (CPOM) laws, supervision mandates, and insurance credentialing barriers.

In these states, PAs face significant roadblocks, making it difficult to function as an independent provider. While workarounds like Management Services Organizations (MSOs) exist, the complexity and restrictions often make these states not worth the effort unless working in a niche model.

This section outlines states where PA ownership is nearly impossible, details the barriers, and provides workaround options where feasible.

1. New York – Nearly Impossible for PAs to Own a Practice

🛑 Why It’s Difficult:

• CPOM laws prevent PAs from fully owning or controlling a practice. A PA must partner with a physician-owned Professional Corporation (PC) or Professional Limited Liability Company (PLLC).
  
• Strict supervision ratios (1 physician per 4 PAs) (New York Education Law § 6542).
  
• Medicaid billing requires direct physician oversight, making independent reimbursement challenging.
  
  

🔄 Workaround (Not Ideal):

• MSO Model – A PA can own an administrative services company that contracts with a physician-owned PC. However, this still requires physician involvement and does not allow full autonomy.
  
• Telemedicine 1099 contracting with out-of-state companies (not a true ownership solution).
  
  

📌 Verdict: NOT Recommended unless forming an MSO with a strong legal team.

2. Pennsylvania – Ownership Only Under Physician Control

🛑 Why It’s Difficult:

• CPOM restrictions prevent PAs from forming their own medical business.
  
• PAs must work under continuous supervision, limiting independent decision-making.
  
• Reimbursement requires physician oversight, making it hard to collect direct insurance payments.
  
  

🔄 Workaround (Not Ideal):

• PLLC or PC with a physician co-owner (but PAs lack control over clinical decisions).
  
• Avoid insurance billing and explore cash-pay, aesthetics, or functional medicine models.
  
  

📌 Verdict: Very Restrictive. Consider alternative states.

3. Massachusetts – CPOM + Heavy Supervision Makes It Nearly Impossible

🛑 Why It’s Difficult:

• PAs cannot own a medical practice outright, even with a physician partner.
  
• Supervision is required for ALL clinical activities, eliminating any true independence.
  
• PAs cannot independently prescribe controlled substances, further restricting autonomy.
  
  

🔄 Workaround (Not Ideal):

• Become a 1099 contractor instead of trying to own a practice.
  
• Explore telemedicine or concierge-style practices where CPOM restrictions may not apply as heavily.
  
  

📌 Verdict: Not a viable state for PA ownership. Move on.

4. New Jersey – CPOM & Physician Control Required

🛑 Why It’s Difficult:

• PAs cannot own a medical practice outright.
  
• Physician supervision is required for most services, including prescribing.
  
• Billing and credentialing are tied to physician oversight, limiting reimbursement options.
  
  

🔄 Workaround (Not Ideal):

• MSO model with a physician-owned PC.
  
  
• Cash-pay services, avoiding insurance altogether (still requires physician involvement).
  
  

📌 Verdict: Not worth the effort unless working in a unique specialty.

5. Rhode Island – Full Physician Supervision, No Ownership Rights

🛑 Why It’s Difficult:

• PAs must be supervised at all times, eliminating independent practice.
  
  
• State law does not allow PAs to own a medical business (Rhode Island General Laws § 5-54-8).
  
  
• Strictest prescribing laws – PAs must receive explicit approval from a supervising physician for all prescriptions.
  
  

🔄 Workaround (Not Ideal):

• No viable workaround for independent practice.
  
• Strictest rules in New England for PAs.
  
  

📌 Verdict: 100% Not Recommended. No viable PA ownership path.

6. Alabama – Highly Restrictive Supervision & No PA Practice Ownership

🛑 Why It’s Difficult:

• PAs cannot form their own business entity to practice medicine.
  
• Must have on-site physician supervision at least 10% of the time.
  
• State law requires detailed reporting of PA activity to the medical board.
  
  

🔄 Workaround (Not Ideal):

• 1099 contracting only – No independent practice options available.
  
  

📌 Verdict: Avoid Alabama if looking for PA ownership opportunities.

7. Kentucky – Full Physician Control, No Independent PA Businesses Allowed

🛑 Why It’s Difficult:

• All PA work must be under direct physician supervision.
  
• PAs cannot own a medical practice in any form.
  
• Even 1099 PAs must have signed contracts with a physician to provide services.
  
  

🔄 Workaround (Not Ideal):

• Avoid trying to own a business in Kentucky.
  
• Look into states like Ohio or Indiana instead.
  
  

📌 Verdict: One of the worst states for PA ownership. No path to independence.

8. South Carolina – Heavy Supervision & No PA-Owned Medical Entities

🛑 Why It’s Difficult:

• CPOM laws prohibit non-physicians from owning medical entities.
  
• PAs must be supervised at all times and have a written agreement detailing all duties.
  
• PA scope is very limited compared to other states.
  
  

🔄 Workaround (Not Ideal):

• Look into telemedicine options outside of South Carolina.
  
• Consider working in nearby Georgia instead, which has more PA-friendly laws.
  
  

📌 Verdict: Not worth the hassle for PAs wanting to own a practice.

Final Thoughts: Best to Worst States for PA Practice Ownership

🔵 Best States for PA-Owned Practices:

• Arizona, Colorado, Nevada, Washington, Illinois, North Carolina, Georgia, Florida
  
  

🟡 Moderate States (Possible but Tricky):

• California (Requires PA Corp & 49% max PA ownership)
  
• Texas (Requires Physician Partnership but Allows Co-Ownership in PLLCs)
  
• New Mexico (Some CPOM Barriers but Workable for Certain Models)
  
  

🔴 Worst States – Avoid for PA Practice Ownership:

• New York, Pennsylvania, Massachusetts, New Jersey, Rhode Island, Alabama, Kentucky, South Carolina

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Sources:

• California Business & Professions Code §§3502.3, 3516, 3540 (PA practice agreements, supervision ratio, PA corporations)​
  mbc.ca.gov
  mbc.ca.gov
  codes.findlaw.com
  
  
• Texas Occupations Code §§204.204, 157.001, 157.0512 (PA supervision and delegation limits)​
  law.justia.com​
  law.justia.com
  ; Texas HB 2098 (2011) (PA minority ownership in PLLCs)​
  legis.state.tx.us
  
  
• Florida Statutes §458.347 & §459.022 (PA licensure and prescribing); Fla. Admin. Code 64B8-30 (Board of Medicine PA rules)​
  flsenate.gov
  flsenate.gov
  
  
• New York Education Law §6542 (Physician Assistant practice standards: supervision and ratio)​
  nysenate.gov
  nysenate.gov
  
  
• Pennsylvania SB 397/398 (2021 Acts 68 & 69) (modernizing PA supervision to collaboration, 6:1 ratio)​
  stevenslee.com
  ​
  legis.state.pa.us
  ; 49 Pa. Code §18.144 (old supervision duties)​
  lambmcerlane.com
  
  
• Illinois Physician Assistant Practice Act, 225 ILCS 95 (collaborative agreements, 7 FTE per physician)​
  ilga.gov
  ​
  ilga.gov
  ; 225 ILCS 95/7.5 and 95/7.7 (written collaborative agreement requirements)​
  ilga.gov
  ​
  ilga.gov
  
  
• Ohio Rev Code 4730 & Ohio Admin. Code 4730 (PA supervision agreement, limits) (See
  law.justia.com
  continuous supervision definition)
  
  
• Georgia Code O.C.G.A. §43-34-103 and GA Comp. R. & Regs. 360-5 (PA duties, 4:1 ratio, no Schedule II prescribing)​
  rules.sos.ga.gov
  rules.sos.ga.gov
  
  
• North Carolina Gen Stat §90-18.1 and 21 NCAC 32S .0213 (PA supervision rules: continuous but off-site, semiannual meetings)​
  casetext.com
  casetext.com
  
  

Michigan Public Health Code, MCL 333.17001 et seq., as amended by 2016 PA 379 (PA practice agreements replacing supervision; removal of ratio limits and “supervision” terminology)​op.nysed.gov
michigan.gov