Colorado Practice Structure Guide: Section 12-240-138, the Dead 2026 Aesthetic Ownership Bill and the Fee Statute's Marketing Exception

Entity and Ownership

C.R.S. 12-240-138 lets persons licensed by the Colorado Medical Board form professional service corporations under the Business Corporation Act. Shareholders are Colorado-licensed physicians who at all times own their shares in their own right and actively practice at the corporation. Physician assistants may hold shares only if physicians keep majority ownership. The president must be a shareholder and director, lay directors, officers or heirs may not control physicians' independent medical judgment, heirs may hold shares for up to two years and ineligible shareholders must sell. The name must include professional company or professional corporation or an abbreviation. We found no separate board registration and did not verify Secretary of State filing details.

The Corporate Practice Position

Colorado has both a statute and case law. The medical practice act makes it unprofessional conduct to practice as the partner, agent or employee of, or in a joint venture with, an unlicensed person or entity, with exceptions for the professional corporation statute and certain hospital provisions, and it says nothing in that paragraph lets a corporation practice medicine or creates a corporate practice exception. Section 12-240-138 says corporations may not practice medicine and provides discipline for violations. Pediatric Neurosurgery v. Russell (Colo. 2002) is quoted for the proposition that a corporation cannot perform medical acts or be licensed. Daly v. Aspen Center for Women's Health (Colo. App. 2005) held a corporation owned by nurse midwives was not vicariously liable for a physician's alleged negligence, and we did not verify its reporter citation. A law firm reports a Colorado appellate decision reversing a $15 million verdict against a surgery center on corporate practice grounds, without giving the case name. We found no Medical Board policy statement on MSOs and no Attorney General action. The Board did close two Colorado Springs clinics by cease-and-desist order for lack of licensed ownership and unlicensed practice, per a trade report with an unclear date.

House Bill 26-1249 would have let physician assistants own a majority of a corporation organized solely for medical-aesthetic services and let estheticians, cosmetologists, nurses, advanced practice nurses and physician assistants hold shares there. The House committee postponed it indefinitely, 13 to 0, on March 25, 2026. As the law stands, non-physician ownership of a medical corporation remains unlawful.

The Management Agreement and Fees

C.R.S. 12-240-132 makes dividing fees for sending, bringing or recommending patients, paying anyone for that, and billing in your own name for services rendered by someone else a class 2 misdemeanor and grounds for discipline, with an exception for paying an independent advertising or marketing agent, including per-patient or performance-based pay. We found no express ban on percentage-of-revenue MSO fees, and the percentage-of-collections concern comes from vendor commentary. Physicians and physician assistants may not take value from drug makers for prescribing a particular drug.

SB25-083, effective August 6, 2025 and prospective only, removes the highly compensated worker exception for non-competes and non-solicits that restrict the practice of medicine, advanced practice nursing or dentistry, adds patient-communication protections and caps minority-owner sale-of-business covenants by formula. Colorado's Hospital Transfer Act covers hospitals and listed facilities and does not clearly cover physician practices or MSOs, and broader notice bills died in 2025 and 2026.

Med Spa and Aesthetic Rules

Colorado lets unlicensed persons render services under the personal and responsible direction and supervision of a Colorado-licensed physician, but not prescribing. Medical Board Rule 1.17 allows delegation of only routine, technical services, bars delegating prescribing and re-delegation, requires the physician generally on premises and readily available (off-site but in Colorado if the delegate follows detailed written protocols), monitoring quality at least every two weeks, reassessing delegate competence annually and reviewing each patient's chart within 14 days. A medical-aesthetic office must post a notice naming each delegating physician and patients must sign a disclosure that the service is delegated to an unlicensed person. House Bill 25-1024, effective August 6, 2025, added disclosure duties for physicians and advanced practice nurses delegating medical-aesthetic services to a person who is not a licensed provider, and we did not see its enacted text or code cite. A 2026 med spa deceptive trade practices bill and a compounded GLP-1 weight-loss bill were postponed indefinitely. We found no Colorado IV-specific statute or med spa facility license.

How We Structure It

As a rule we set up a professional service corporation owned by the licensed physician, with no exceptions for what looks like a more flexible state. Patients pay the physician-owned practice. The practice pays the management company a fixed monthly fee under a written management services agreement. The management company pays MedGrid a fixed monthly retainer for consulting. The MSO never practices medicine, and the physician makes every clinical decision. In Colorado the delegating physician is named on the posted notice, patients sign the delegation disclosure, and the MSO has no part in any decision touching medical judgment.

Disclaimer

This article is general educational information, not legal advice. Entity and corporate practice rules change, and parts of this summary rest on secondary sources, so have health care counsel in the state confirm the structure before you form or sign anything.