How to Legally Own a Telehealth Clinic Without A Medical License
The Complete Legal Framework Used by Fortune 500 Companies and $150B+ in Private Equity Healthcare Transactions
The proven legal structure that lets non-physicians own telehealth clinics. The same structure private equity uses for $150B+ in acquisitions, hospital systems use for partnerships, and the OIG validated in June 2025.
You want to own a telehealth clinic.
You're not a doctor.
And you want to do it legally.
Good.
Because there's a proven legal structure that lets you do exactly that. The same structure:
- ·Private equity firms use for $150+ billion in healthcare acquisitions
- ·Hospital systems use for physician partnerships
- ·CVS and Walgreens use for their healthcare clinics
- ·The OIG validated the key principles of in June 2025
It's called the three-entity MSO model.
It's been used for 30+ years.
It solves every legal issue.
And it's how you legally own a telehealth clinic without being a doctor.
The Two Legal Problems You Need to Solve
To own a telehealth clinic without being a doctor, you need to solve two legal issues:
Problem #1
Corporate Practice of Medicine (CPOM)
Most states don't allow non-physicians to own medical practices or employ doctors. If you try to directly own a medical practice, you violate CPOM.
Illegal in California, Texas, New York, Illinois, Ohio, and most other states.
Problem #2
Federal Anti-Kickback Statute
Federal law prohibits paying anyone to induce referrals or generate healthcare business. If you pay doctors based on prescriptions or patient volume, that's a kickback.
Federal crime with up to 10 years in prison.
The solution:
The three-entity structure solves both problems. Completely. Legally.
The Three-Entity Legal Structure
There are three separate legal entities. Each has a specific role. Each solves a specific legal problem.
Your Company
Brand Partner
MSO
Infrastructure
IMG
Physician Group
Your Company (The Brand Partner)
Marketing and Customer Acquisition
A marketing and customer acquisition company. You're a marketing company, not a medical practice. Same way a pharmaceutical advertising agency isn't practicing medicine. They're marketing. You're marketing.
What it does
- ·Build your brand
- ·Market to patients
- ·Acquire customers
- ·Handle customer service (non-clinical)
- ·Provide coaching and support (non-medical)
What it doesn't
- ·Practice medicine
- ·Employ physicians
- ·Control medical decisions
- ·Tell doctors what to prescribe
This solves half the CPOM problem. Because you're not practicing medicine or employing doctors.
The MSO (Management Services Organization)
Infrastructure and Administrative Services
Buffer between your company and the medical practice. You pay the MSO for services. The MSO pays the physician group. No direct relationship between you and the physicians. No employment. No control.
What it does
- ·Provides technology (EMR, patient portal, CRM)
- ·Handles HIPAA compliance
- ·Manages pharmacy relationships
- ·Processes billing and payments
- ·Provides non-clinical administrative support
What it doesn't
- ·Practice medicine
- ·Control physician decisions
- ·Own the medical practice
This completes the CPOM solution. Structural separation between business and medicine.
The IMG (Independent Medical Group)
Professional Corporation Owned 100% by Physicians
Independent medical practice owned and controlled entirely by physicians. Makes independent medical judgments. This is the only entity practicing medicine.
What it does
- ·Employs all physicians
- ·Makes ALL medical decisions
- ·Evaluates patients
- ·Prescribes medications when medically appropriate
- ·Holds medical liability
- ·Maintains physician licenses and credentials
What it doesn't
- ·Take orders from you
- ·Follow business quotas
- ·Prescribe based on profit
How Money Flows Legally (The Anti-Kickback Solution)
Here's the exact money flow:
Notice: You never pay the physician directly. You pay the MSO for services. The MSO pays the IMG for physician consultations. The IMG pays the physician.
The critical part:
The IMG pays physicians $60 per consultation. Not per prescription. Not per patient enrolled. Not per revenue generated. Per consultation.
Whether they prescribe or not. Same $60 if the physician prescribes. Same $60 if the physician says "no, you're not a candidate."
This is called Fair Market Value compensation.
This is how you avoid Anti-Kickback violations.
Physician is compensated for
- · Their time (20-30 minute evaluation)
- · Their expertise (medical judgment)
- · Their liability (medical decision-making)
NOT compensated for
- · Writing prescriptions
- · Generating referrals
- · Creating long-term patients
- · Hitting quotas
Legal = Paying for professional services at Fair Market Value.
Illegal = Paying for outcomes, prescriptions, or referrals.
The OIG Validated These Principles (June 2025)
In June 2025, the U.S. Department of Health and Human Services' Office of Inspector General issued Advisory Opinion No. 25-03.
They reviewed a telehealth MSO arrangement where a physician-owned professional corporation contracts with an MSO, the MSO provides administrative services, healthcare professionals are leased for telehealth services, and all payments are at Fair Market Value.
They evaluated whether this violated the Anti-Kickback Statute.
OIG Advisory Opinion 25-03 · June 2025
"Would not generate prohibited remuneration under the Federal anti-kickback statute"
Screenshot from the official OIG Advisory Opinion No. 25-03, issued June 6, 2025. The opinion found the arrangement "Favorable" with low risk of fraud and abuse.
Translation: Compliant.
Because the arrangement followed four key principles:
Fees at FMV established by independent valuator. Market-rate, not inflated to induce referrals.
Same payment regardless of outcomes. Paid whether reimbursed or not. No volume bonuses.
Written, signed, 1+ year term, specifies services. Meets 42 C.F.R. § 1001.952(d)(1).
Fee methodology set in advance. Not determined by volume, prescriptions, or outcomes.
The OIG validated these principles. The three-entity MSO model follows these same principles. That's the federal compliance framework.
The 30-Year CPOM Precedent
The three-entity MSO structure isn't new. It was created in the 1990s to solve Corporate Practice of Medicine issues.
$150B+
PE transactions
30+
Years of precedent
50
State coverage
Private Equity Healthcare Acquisitions
When private equity firms buy medical practices, they can't directly own them. CPOM prohibits it. So they use the MSO structure.
Examples
- · KKR - Envision Healthcare ($10B+ acquisition)
- · Blackstone - TeamHealth ($6B+ acquisition)
- · Warburg Pincus - MultiCare investments
Combined transaction value: $150+ billion. Vetted by Jones Day, K&L Gates, Sullivan & Cromwell, Kirkland & Ellis.
If it wasn't legal, they wouldn't deploy $150 billion into it.
Hospital-Physician Partnerships
Hospitals can't employ physicians in strict CPOM states. So they use Management Services Agreements. Cleveland Clinic, Mayo Clinic, Kaiser Permanente: thousands of arrangements.
Retail Healthcare
CVS MinuteClinic and Walgreens Healthcare use MSO structures. Retail company provides location and infrastructure. Medical practice is separate entity. Physicians employed by medical group, not retail company.
This is standard practice. Not experimental. Not a loophole. The gold standard for 30+ years.
How to Set Up the Structure (The Legal Requirements)
To legally own a telehealth clinic using this structure, you need:
- ✓Your company (Brand Partner LLC or Corp)
- ✓MSO entity (provides infrastructure)
- ✓IMG entity (Professional Corporation owned 100% by physicians)
- ✓Must be legally separate, no common ownership between your company and the IMG
- ✓Brand Partner Agreement (defines relationship with MSO, 1+ year term)
- ✓Management Services Agreement (MSO ↔ IMG, FMV fees, clinical autonomy provisions)
- ✓Business Associate Agreements (HIPAA compliance, data access, privacy)
- ✓All agreements in writing, signed, specific about services, fee methodology set in advance
- ✓Independent third-party valuation
- ✓Market comparables
- ✓Industry standards ($25-60 per telehealth consultation)
- ✓Documented methodology
- ✓Same fee regardless of outcome
- ✓IMG must be 100% owned by licensed physicians
- ✓Independent from your company
- ✓Independent from the MSO (in strict CPOM states)
- ✓Corporate documents prove physician ownership and control
- ✓Physicians determine who qualifies medically
- ✓No quotas or targets
- ✓No pressure to prescribe
- ✓Can refuse to prescribe without penalty
- ✓You cannot tell physicians what to prescribe or override medical judgment
- ✓Physicians licensed in patient state
- ✓State-specific telemedicine compliance
- ✓DEA registration for controlled substances
- ✓Texas patient → Texas-licensed physician
- ✓Secure technology platforms
- ✓Business Associate Agreements
- ✓Role-based access controls
- ✓Privacy and security policies
- ✓Written agreement
- ✓Signed by parties
- ✓Term of at least 1 year
- ✓Specifies all services
- ✓FMV compensation set in advance
- ✓Not based on referral volume
- ✓Meets 42 C.F.R. § 1001.952(d)(1)
If you meet all eight requirements, you're legally compliant.
State-by-State Considerations
Corporate Practice of Medicine is state law, not federal. Requirements vary by state:
Strict CPOM States
California, Texas, New York, Illinois, Ohio, New Jersey
Medical practice MUST be physician-owned. Three-entity structure REQUIRED. IMG must be Professional Corporation.
Minimal CPOM States
Arizona, Nevada, Utah, Montana, Wyoming
Allow corporate practice of medicine. Still use three-entity for Anti-Kickback protection.
Even in minimal CPOM states, use the three-entity structure. It provides Anti-Kickback protection (federal law) and it's the conservative, bulletproof approach.
How to Verify Your MSO Partner Is Compliant
Before partnering with an MSO, verify they follow the legal framework:
Do you follow OIG-validated Anti-Kickback principles?
They should explain FMV methodology, outcome-independent payments, safe harbor compliance, not based on referral volume.
If vague, walk away.
Is the IMG 100% physician-owned?
Must be yes. Ask to see corporate documents proving physician ownership.
If non-physicians own any part, red flag.
How are physician fees determined?
Should be Fair Market Value with documented methodology, $25-60 per consultation, outcome-independent.
If 'it depends on prescriptions,' run.
Are physicians licensed in all 50 states?
For nationwide operation, need 50-state licensing with state-specific telemedicine compliance.
Which healthcare law firm validated your structure?
Should name reputable firm: Jones Day, K&L Gates, Hall Render, Nixon Law Group.
If 'our cousin is a lawyer,' walk away.
Can I review the agreements?
Should provide Brand Partner Agreement, Management Services Agreement, Business Associate Agreement. Legitimate MSOs are transparent.
If secretive, red flag.
How do you ensure Anti-Kickback compliance?
Should explain independent FMV valuation, outcome-independent compensation, safe harbor framework, regular compliance audits.
The Legal Framework in Practice
Here's how this works when a patient signs up:
- · Patient sees your marketing (Instagram, ads, website)
- · Interested in testosterone therapy
- · Clicks your link
- · Fills out medical history on your branded website
- · Pays $330/month for medication ($197), consult ($83/mo), labs ($50/mo)
- · Patient information routed to IMG physician
- · Physician reviews medical history
- · Makes independent determination on medical appropriateness
- · Physician gets paid $60 for consultation, same fee whether they prescribe or not
- · If medically appropriate → Physician prescribes
- · If NOT medically appropriate → Physician declines
- · No pressure either way. Clinical decision made independently
- · Prescription sent to pharmacy partners
- · Medication shipped to patient
- · Patient receives meds, support, coaching
- · Patient paid: $330/month
- · Your costs: ~$73/month (medication, physician fee, labs)
- · MSO coordinates payments to IMG and pharmacy
- · You keep: ~$257/month gross profit
What Makes This Legal (Summary)
The three-entity MSO structure is legal because:
1. It Solves Corporate Practice of Medicine
Your company doesn't practice medicine. IMG (physician-owned) practices medicine. MSO provides infrastructure. Structural separation.
Precedent: 30+ years, $150B+ in PE transactions, Fortune 500 use.
2. It Follows Anti-Kickback Principles
Fair Market Value compensation. Outcome-independent payments. Safe harbor compliance. Not based on referral volume.
OIG validated these principles in Advisory Opinion 25-03.
3. It Preserves Clinical Autonomy
IMG 100% physician-owned. Physicians control all clinical decisions. No quotas or targets. Can refuse to prescribe.
4. It's Been Validated by Top Legal Authorities
OIG validated principles. Private equity law firms (Jones Day, K&L Gates). Fortune 500 healthcare companies. Hospital systems.
30+ years of precedent.
Common Questions About Legality
But I'm making money when physicians prescribe. Isn't that a kickback?
No. You're not paying physicians to prescribe. You're paying them Fair Market Value to evaluate patients.
The analogy: You own a pharmacy. Doctors write prescriptions. You fill them and make money. Are you paying doctors to prescribe? No. Are you making money when they prescribe? Yes. Is that illegal? No.
Same concept here. Doctors independently evaluate. If medically appropriate, they prescribe. You provide medication and support. You make money. But you're not paying them FOR prescriptions. You're paying them FOR evaluations.
What if physicians prescribe to most patients?
That's fine if it's medically appropriate. Many men over 35 have low testosterone. When properly screened, many qualify. If 60-80% of evaluated patients are medically appropriate, that's medicine. Not kickbacks.
What would be illegal: 100% prescription rate regardless of medical criteria. That would indicate improper influence.
The protection: IMG physicians have medical liability. If they overprescribe, they lose their license. They won't destroy their career to make you money.
Can state medical boards come after me?
No. Medical boards regulate physicians and medical practices. You're not a physician. You're not a medical practice. You're a marketing company.
If they investigate anyone, they'd investigate the IMG. The IMG must prove independent medical decisions, proper documentation, clinical autonomy. You're a separate entity providing non-medical services. Not in their jurisdiction.
What about HIPAA?
HIPAA requires Business Associate Agreements.
The structure: IMG (Covered Entity) → MSO (Business Associate) → You (Subcontractor)
What you can access: Patient contact info, subscription status, payment information, limited data for medication delivery. What you cannot access: Full medical records, detailed clinical notes, PHI beyond necessity.
The MSO provides HIPAA-compliant systems. You're not handling compliance. They are.
Is this really used by Fortune 500 companies?
Yes. Private Equity: KKR's healthcare acquisitions, Blackstone's medical practice investments, Warburg Pincus' healthcare portfolio.
Retail Healthcare: CVS MinuteClinic, Walgreens Healthcare, Amazon Clinic (using MSO structure).
Hospital Systems: Cleveland Clinic physician partnerships, Mayo Clinic affiliated practices, Kaiser Permanente (in CPOM states).
Transaction value: $150+ billion. All using MSO structure for CPOM compliance.
How to Get Started Legally
- · OIG-compliant Anti-Kickback framework
- · Physician-owned IMG
- · 50-state physician licensing
- · Healthcare law firm validation
- · Transparent documentation
- · Sign Brand Partner Agreement
- · Sign Business Associate Agreement
- · Review thoroughly. Ensure FMV, 1+ year term, safe harbor compliance
- · Company name (Your Brand + Health)
- · LLC or Corporation
- · Website and patient portal
- · Marketing materials
- · MSO provides infrastructure. You focus on brand
- · Content marketing
- · Paid advertising
- · Social media
- · Email campaigns
- · Your job: Patient acquisition. IMG job: Medical. MSO job: Everything else.
- · Annual legal audits
- · FMV compensation reviews
- · Clinical autonomy documentation
- · HIPAA compliance assessments
- · MSO handles most, but you should monitor
The Legal Bottom Line
You can legally own a telehealth clinic without being a doctor.
Legal Requirements Checklist
Follow the framework.
Partner with compliant MSO.
Stay within the structure.
That's how you legally own a telehealth clinic without being a doctor.
The legal structure:
Three separate entities (Brand Partner → MSO → IMG)
The legal foundation:
- · Anti-Kickback compliance (OIG-validated principles)
- · CPOM compliance (30+ years of precedent)
- · Fortune 500 validation ($150B+ in transactions)
Not a gray area. Not a loophole.
The proven framework used by Fortune 500 companies for 30+ years.
Legal Disclaimer
This article is for educational purposes only and does not constitute legal advice. OIG Advisory Opinion No. 25-03 addressed a specific physician-to-physician telehealth arrangement; the principles from that opinion are discussed here as they relate to MSO structures generally. Healthcare laws vary by state and are subject to change. Before starting any healthcare-related business, consult with qualified healthcare attorneys in your jurisdiction. Always ensure compliance with federal and state laws, including the Corporate Practice of Medicine doctrine, Anti-Kickback Statute, Stark Law, HIPAA, and state telemedicine regulations.
Ready to use this legal framework to build your telehealth brand?
Schedule a call
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