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
• Options for business structure (PLLC, PC, PA Corporation, etc.)
• Collaboration or supervision requirements
• Timeline to form and start operating a PA-owned practice
  

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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

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The 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.

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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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Texas – PC or PLLC with Physician Ownership Required

• 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 and physician sign-off on each prescription of Schedule II drugs (Texas Occupations Code § 157.051-157.054)
• ‍Timeline to Start: 4–8 weeks for registration

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.
• Texas is a large state so while it does have strict CPOM enforcement, it has a good amount of individuals needing access to care.
  
  

Resources

• Texas Medical Association White Paper on CPOM
• Texas Secretary of State Business Registration‍
• Texas Medical Board

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Arizona – PC or PLLC with Physician Ownership

• Business Structure: Professional Limited Liability Company (PLLC) or Professional Corporation (PC)‍
• Physician Ownership Requirement: Non-licensed individuals may hold up to 49 percent of shares; at least 50 percent of directors and the president must be licensed physicians
• ‍Supervision Requirements: No statutory supervision rules, but non-physician owners must avoid interference with clinical decision-making to reduce regulatory risk‍
• Timeline to Start: 2–4 weeks for business registration

Key Considerations for Arizona PAs:

• CPOM restrictions in Arizona are not codified in law. (Arizona Revised Statutes § 10-3301)
• Supervision is limited to 2 PAs per location (32-2533. Supervising physicians; responsibilities)
• HB 2043 and Collaborative Practice allowing PAs with over 8,000 hours to practice autonomously

References:

• Arizona Corporation Commission Business Registration
• Arizona Regulatory Board of Physician Assistants
• Arizona Revised Statutes Title 10, Chapter 4, Article 3 (Professional Corporations) - specifically ARS § 10-3301‍
• HB 2043 Policy Letter

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Washington – New Rules under SB 5387

• Business Structure: Professional Limited Liability Company (PLLC)
• Physician Ownership Requirement: PAs can fully own a PLLC (RCW 18.71A.020) however there is legislation requiring PC MSO structure for compliance (SB 5387)
• ‍Supervision Requirements: Supervision required‍
• Timeline to Start: 3–6 weeks for business registration

Key Considerations for Washington PAs:

• PAs can own a PLLC: Licensed providers must hold a majority of voting shares, a majority of directors, and occupy all officer positions except secretary and treasurer. Non-licensed individuals/entities may not own controlling shares, serve as directors/officers beyond secretary/treasurer, or influence hiring, revenue distribution, clinical policies, coding, or third-party contracts
• ‍A supervisory agreement with a physician is required and the majority shareholder must be physically present in Washington and substantially engaged in delivering care and managing the practice.
  

Resources:

• Washington Secretary of State Business Formation
• Washington Medical Commission
• RCW 18.100.180 (Professional Service Corporations)
• SB 5387 (2025) — full text of Senate Bill 5387

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Massachusetts - PA Autonomy Under Collaborative Agreement

• Business Structure: PLLC, PC, or LLC
• Physician Collaboration Requirement: Written collaborative agreement with a supervising physician; PAs practice under physician-defined protocols with substantial autonomy (263 CMR 5.04 (4))
• Supervision Requirements: Physician must be available for consultation by telephone or electronic communication; no mandatory on-site presence
• Timeline to Start: 2–4 weeks for entity registration

Key Considerations for Massachusetts PAs:

• The Board of Registration in Medicine enforces PA standards. Collaborative agreements must include quality-assurance provisions and periodic review.
• Scope of practice is broadly defined in the collaborative agreement and may include evaluation, diagnosis, treatment, and prescribing (including controlled substances).

References:

• Collaboration Requirements
• Massachusetts Bill S.1354
• Massachusetts General Laws Chapter 112 § 9E (PA practice)
• Massachusetts Board of Registration in Medicine

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

• Business Structure: Professional Limited Liability Company (PLLC), Limited Liability Company (LLC),  or Professional Corporation (PC)
• Physician Ownership Requirement: None – PAs can fully own a PLLC or PC, but supervision is required (North Carolina General Statutes § 90-21.102, § 55B‑4.)
• Supervision Requirements: Written supervisory agreement filed with the NC Medical Board; defines scope, prescribing authority, and oversight parameters
• Timeline to Start: 3–6 weeks for business formation

Key Considerations for North Carolina PAs:

• The regulatory environment imposes few statutory limits on PA scope of practice, making it one of the most favorable states.
• Supervision rules vary by specialty – certain procedures require direct oversight.
• Collaborative agreements must address controlled-substance prescribing protocols in accordance with NC Medical Board rules. 
• CPOM laws allow for PA-owned businesses but limit certain activities without physician oversight.

References

• North Carolina Corporate Practice of Medicine: 10.1.2: Corporate Practice of Medicine
• North Carolina Secretary of State Business Registration
• North Carolina Medical Board

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Florida – PA-Owned LLCs Allowed, Medical Director Required for all non-Physician owned clinics

• Business Structure: Limited Liability Company (LLC) or Professional Corporation (PC)
• Physician Ownership Requirement: Florida allows non-physicians to own, however all clinics must be registered as healthcare clinics and have a Medical Director
• Supervision Requirements: Yes, a medical director is required if not owned by a physician. 
• Timeline to Start: 4–8 weeks for business formation

Key Considerations for Florida PAs:

• PAs can fully own an LLC, but a Medical Director must be designated for the clinic.
• Certain specialties (e.g., aesthetics, pain management) require stricter supervision and typically require the Medical Director to be within 75-miles of the clinic.
• Florida has complex Medicaid rules requiring the physician to live within the state and be enrolled to accept Medicare. 

References

• Florida Statutes 2025: Clinic Responsibilities 
• Florida Secretary of State Business Registration‍
• Florida Board of Medicine

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Colorado – PA Minority Owned LLCs Allowed, Minimal Supervision Required

• Business Structure: Professional Corporation (PC), Limited Liability Company (LLC) or Professional Limited Liability Company (PLLC) (CO Rev Stat § 12-240-138 (2024))
• Corporate Naming Requirements: Corporate Naming and Liability: Entity name must include “professional company” or “professional corporation”; corporate and individual liability provisions require professional liability insurance or joint-and-several liability for claims
• Physician Ownership Requirement: All shareholders must be licensed physicians, except that physician assistants may hold shares only if physician shareholders maintain majority ownership (>50 %)
• Supervision Requirements: Supervisory agreement required
• Timeline to Start: 2–4 weeks for business formation

Key Considerations for Colorado PAs:

• The articles of incorporation must expressly limit practice to actively licensed physicians and PA
• Corporations are prohibited from practicing medicine directly; any corporate action violating professional conduct is grounds for board discipline of responsible licensees
• Insurance requirements mandate coverage of at least $50,000 per claim (minimum $150,000 annual aggregate per licensee) or higher as structured by the entity

References

• Colorado Secretary of State Business Registration‍
• Colorado Medical Board
• Colorado Revised Statutes § 12-240-138 (Professional Service Corporations and PLLCs)
• Colorado Business Corporation Act (Title 7, Articles 101–117)
• Colorado Limited Liability Company Act (Title 7, Article 80)

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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.

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New York – Strict CPOM

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).
  

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.

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

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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.

Very Restrictive. Consider alternative states.

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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).

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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.

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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.

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

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South Carolina – Heavy Supervision

Why It’s Difficult:

• PAs must be supervised at all times and have a written agreement detailing all duties.
• PA scope is very limited compared to other states.
• PAs must work with the physician in person for at least 6-months before working independently. 

Workaround (Not Ideal):

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

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Final Thoughts: Best to Worst States for PA Practice Ownership

🔵 Best States for PA-Owned Practices:

• Arizona, Colorado, Washington, North Carolina,  Florida

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🟡 Moderate or Conditional States:

Ownership possible with limitations, structured models, or close physician involvement

• California – PAs can form a PAC or own up to 49% of a PC; physician collaboration required.
• Texas – Physician must own 51%; PLLC or PC models required; CPOM strictly enforced.
• Pennsylvania – Full physician control required; no independent reimbursement.
• Massachusetts – Collaborative model in place, but limited path to ownership/control.

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🔴 Restrictive States – Ownership Not Recommended:

Significant barriers due to CPOM, supervision mandates, or regulatory complexity:

• New York – Strict CPOM; no full PA ownership; MSO workaround only.
• New Jersey – CPOM enforced; physician ownership/control required.
• Alabama – No ownership allowed; on-site supervision mandates.
• Kentucky – Full physician control; no business formation path for PAs.‍
• South Carolina – High supervision requirements; limited autonomy.