Pennsylvania: Ownership and Oversight
Strict CPOM (1938 case law + Medical Practice Act). Physician-only medical entities under one of the oldest CPOM holdings in the country, a nursing-side ownership rule that quietly leaves room for CRNP-owned practices, and oversight recently modernized on the PA side by Act 79.
Who the statute actually covers
- The doctrine's source: Neill v. Gimbel Brothers, Inc., 199 A. 178 (Pa. 1938), never overruled, plus the Medical Practice Act of 1985 (63 P.S. § 422.1 et seq.). Only licensed physicians may be shareholders/partners/members of medical entities, and all ultimate beneficial owners must be licensed.
- Nursing ownership rule (49 Pa. Code § 21.6): nurses may form a professional corporation with other RNs or with "other health care practitioners who treat human ailments... without receiving a referral or supervision from another health care practitioner." Because CRNPs practice in collaboration (not supervision), CRNP practice ownership is not expressly authorized but is widely done.
- "PACA" (49 Pa. Code §§ 21.282a-21.285): Prescriptive Authority Collaborative Agreement, filed through PALS, naming the CRNP, collaborating physician, at least one substitute physician, specialty, drug categories, and insurance.
- Act 79 (2021): PA-side modernization — written agreements filed with (not approved by) the Board, with a 10% audit; the 100% countersignature rule removed except during the first 12 months post-graduation or in a new specialty.
1. Who can own what
| Entity / Path | Who may own | Key limits |
|---|---|---|
| Medical PC / LLP / RPC | Licensed physicians only; all ultimate beneficial owners licensed. | Neill v. Gimbel remains good law; HMOs, licensed hospitals, and health facilities may employ physicians. |
| CRNP-owned practice | Not expressly authorized, not prohibited. Widely done with collaborating-physician oversight. | Entity selection is the trap: restricted professional company services list omits nursing; use PC under § 21.6 or an ordinary LLC. |
| PA ownership | No lane into medical entities. | |
| Lay / MSO | Not permitted in the professional entity; Pennsylvania courts treat management-company profit participation as a prohibited de facto partnership interest. | Captive-PC cases read on Pennsylvania through the same logic as Allstate v. Northfield. |
2. Collaborative and supervisory oversight
| Role | Agreement required | Oversight mechanics | Path to independence |
|---|---|---|---|
| PA | Written agreement between PA, primary supervising physician, and the Board: filed with the Board under Act 79 (Board audits 10%). | Countersignature: 100% of charts only during the first 12 months post-graduation or in a new specialty; otherwise physician-determined. Act 79 raised the number of PAs a physician may primarily supervise (from 2 to 4; verify current Board regs). | None. |
| NP / CRNP | Written collaborative agreement for practice; separate written PACA filed through PALS for prescribing, naming at least one substitute physician. | Collaboration means immediate availability, an emergency plan, and regular coordination; no statutory percentage. Old CRNP-per-physician ratio eliminated (2009). Schedule II carries supply limits under § 21.284. | None. Reduced-practice state with no hours-based exit; FPA bills perennial. |
3. Primary authorities
- Neill v. Gimbel Brothers, Inc., 199 A. 178 (Pa. 1938); Medical Practice Act of 1985.
- 15 Pa.C.S. (professional corporations, LLPs, restricted professional companies).
- 49 Pa. Code § 21.6; § 16.21; §§ 21.282a-21.285.
- Act 79 of 2021 (SB 398) and implementing regulations.
Practical read: Pennsylvania runs on an 87-year-old case and it still bites: management-fee structures that participate in profits get recharacterized as illegal partnerships. On the clinician side, the state is quietly friendlier than its reputation. The compliance document Pennsylvania auditors actually pull is the PACA filing in PALS — make sure it matches the practice.
General education, not legal advice.