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Law Educator, Esq., Attorney
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My partner and I run a small practice consulting company in

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My partner and I run a small practice consulting company in Georgia, and we are exploring the idea of buying some specialty practices and starting a practice management company. I was wondering how practice management companies get around state laws of physician ownership for practices. Some of the large practice management companies that own practices are publicly traded, so they are obviously not only physician owned. Thank you for your assistance. Georgia code for medical practices states (43-34-21):-- "To practice medicine," "the practice of medicine," or "practicing medicine" means to hold oneself out to the public as being engaged in the diagnosis or treatment of disease, defects, or injuries of human beings; or the suggestion, recommendation, or prescribing of any form of treatment for the intended palliation, relief, or cure of any physical, mental, or functional ailment or defect of any person with the intention of receiving therefor, either directly or indirectly, any fee, gift, or compensation whatsoever; or the maintenance of an office for the reception, examination, and treatment of persons suffering from disease, defect, or injury of body or mind; or attaching the title "M.D.," "Oph.," "D.," "Dop.," "Surgeon," "Doctor," "D.O.," "Doctor of Osteopathy," "Allopathic Physician," "Osteopathic Physician," or "Physician," either alone or in connection with other words, or any other words or abbreviations to one's name, indicating that such person is engaged in the treatment or diagnosis of disease, defects, or injuries to human beings, provided that the terms "doctors of medicine," "doctors of osteopathic medicine," "doctors of medicine licensed to practice in the state," and similar terms wherever used or appearing in this article or elsewhere shall mean and include only those persons licensed under this article.-- The section about "maintenance of an office for the reception, examination, and treatment of persons suffering from disease, defect, or injury of body or mind" seems to indicate that only physicians can own medical practices.

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They get around the law because they form a company that merely owns the practices and does not offer to practice medicine nor to they hold themselves out to practice medicine and for each practice they own they have a medical director in charge of that practice and they hire an overall medical director to manage the entire operation. Thus, all they are doing is managing and not practicing medicine. There can be corporate ownership of these practices, but you are going to need a local attorney to set up the corporation and you will need a licensed doctor to be the medical director of the corporation.

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Customer: replied 6 years ago.
That makes sense. So, in creating a corporation or LLC that owns the practices and handles the business aspects of the practices, and hiring a medical director at each practice that manages the practice of medicine and an overall medical director that manages the medical program, they are then able to advertise the practices to the public as providing medical services and are able to employ the physicians who practice the medicine? Do the medical directors that are employed by the PPMC need to have any ownership, or do they just need to be empowered to make all medical decisions?

They do not need to have ownership, but many of these corporations give them some small percentage of ownership as a means of their compensation package (usually 25% or less, depending on the situations). The medical directors run the actual medical practice operations so they hire the doctors and direct the doctors. When setting these up you need a local corporate lawyer that deals with medical corporations to assist you.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110362
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Law Educator, Esq. and 3 other Business Law Specialists are ready to help you
Customer: replied 6 years ago.
Great, thank you for your assistance.
Thank you.

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