Specialty vs profession
The distinction that determines your entity count:
A multi-specialty medical group is one PC owned by a physician, employing physicians of every specialty. A medical-plus-dental group is two entities.
Where the lines fall
These groupings are statutory allowances, not general principles. A state permits a combination only if its professional entity statute says so. If the statute doesn’t name your combination, assume separate entities are required.
Behavioral health is the hard case
The vertical where this bites hardest, because a single behavioral health group routinely employs:- Psychiatrists (MD/DO)
- Psychiatric nurse practitioners (APRN)
- Psychologists (PhD/PsyD)
- Clinical social workers (LCSW)
- Professional counselors (LPC/LMHC)
- Marriage and family therapists (LMFT)
- A broad “healthcare professional” entity statute that permits several licensed professions in one entity
- A physician-owned PC employing the others as permitted by scope-of-practice rules
- Separate entities for the prescriber group and the therapy group
- A psychologist-owned or LCSW-owned entity in states that permit it
Structuring a multi-profession group
When professions must be siloed, the shape extends the hub-and-spoke: Each entity gets its own MSA, its own transfer restriction agreement, its own BAA, its own EIN, its own Type 2 NPI, its own payer enrollments, its own bank accounts, and its own books. Per state. A three-profession group in four states is twelve professional entities plus an MSO. This is why integrated care models are operationally heavy, and why many groups deliberately narrow to one profession.Shared services and shared space
The MSO can provide space, equipment, staff, and systems to all of the entities — that is the point of having one MSO. Three things need care: Cost allocation. Each PC’s management fee should reflect the services that PC actually receives. Allocating shared costs arbitrarily undermines the fair market value analysis for every entity in the group. Use a defensible driver — headcount, square footage, visit volume, or direct attribution — and document the methodology. Referrals between entities. When the medical PC refers to the physical therapy PC and both are managed by the same MSO, you are in Stark and Anti-Kickback Statute territory. Federal Stark restricts physician referrals for designated health services to entities with which the physician has a financial relationship, and physical therapy is a designated health service.1 This needs specific analysis, not a general comfort that “we’re all one group.” Shared records. If the entities share an EHR, records must remain segregated by entity, since each PC owns its own patients’ records. Access controls should reflect that, and BAAs need to cover the arrangement.Billing consequences
Separate entities mean genuinely separate billing operations:🦷 Dental, dental benefits are frequently administered by entirely different companies from a patient’s medical plan, with their own networks, their own credentialing, and their own annual maximums. A combined medical-dental group runs two nearly disjoint payer operations.
👁 Optometry, the same split, sharper. Vision plans (VSP, EyeMed) and medical plans cover different services for the same patient, and determining which to bill is a per-encounter judgment. See Optometry and vision.
Questions to answer before building one
- Which professions will we deliver?
- Does our state permit any of them in a combined entity?
- Who will own each entity, and are they licensed in that state?
- How will shared costs be allocated, and is the method documented?
- Do referrals between our entities implicate Stark or AKS?
- Can our EHR and clearinghouse handle every claim format?
- How many total entities does this produce at our target footprint, and can we operate that many?
Sources
- 42 U.S.C. § 1395nn (Stark Law); designated health services defined at 42 C.F.R. § 411.351. CMS Physician Self-Referral.