Connecticut Practice Structure Guide: The Professional Corporation, the Medical Spa Statute and Transaction Notice

Entity and Ownership

Chapter 594a of the General Statutes governs professional corporations. Shareholders must be individuals licensed to render the same service, with listed combinations allowed such as physicians with physician assistants, APRNs, chiropractors, psychologists and podiatrists. Only licensed people may be shareholders, directors or officers, and services must be rendered through licensed people, though non-professional assistants are not covered. The corporation may engage in no business other than the professional services, with investments and property incident to practice allowed. The name must include professional corporation or P.C. plus a word describing the service or a shareholder's surname, and the corporation pays an annual professional service fee to the State Treasurer. If non-compliance with the ownership rules is brought to the Secretary of the State's attention, the Secretary certifies it to the Attorney General for appropriate action to dissolve the corporation. We found no Department of Public Health registration of the entity.

The Corporate Practice Position

We found no express corporate practice statute. A 2023 report of the Office of Health Strategy's physician practice workgroup says the doctrine holds that only licensed providers may practice medicine and that Connecticut's statutes and case law had not been thoroughly researched. The license statute requires a license to diagnose or treat. Separately, the Department of Public Health may not adopt regulations on business practices, defined to include ownership of a regulated practice, so enforcement runs through the professional corporation statute, licensing and general law. We found no reported enforcement against a physician-owned practice with a management company, and a case some guides cite as a corporate practice decision appears to be a vicarious liability case, so we do not cite it.

The Management Agreement and Fees

The discipline grounds we read for physicians list no fee-splitting or referral-fee ground, and we could not verify any Connecticut fee-splitting authority, so we do not assert one. Clinical control follows from the professional corporation statute and the supervision duties for physician assistants.

Physician non-competes are valid only if necessary to protect a legitimate business interest and reasonable, capped at one year and fifteen miles, and unenforceable if the employer terminates without cause, with a narrow exception for small physician-owned groups on one rule.

Transaction Notice and the 2026 Session

A material change to a group practice requires 30 days' notice to the Attorney General when it results in a group of eight or more physicians or involves a hospital, system, captive professional entity or medical foundation, and the Commissioner of Health Strategy gets post-closing notice. A start-up with a management company and no merger or acquisition does not appear to trigger it, though a sale of a group of eight or more would.

House Bill 5045 in 2026 passed the House and stalled in the Senate. The House version would have required certificate-of-need approval or notice for changes in ownership or control of a large group practice from July 2027, and would have exempted a practice-MSO association in which the MSO is paid fair market value under contract and not through profit or revenue sharing. It is not law, but it shows the direction of travel. The one 2026 act on this subject, Public Act 26-22, applies to hospitals only.

Med Spa and Aesthetic Rules

Connecticut's medical spa statute defines a medical spa as an establishment where cosmetic medical procedures are performed, covering injections, fillers, neurotoxins, lasers, intense pulsed light and deeper peels. Each must employ or contract with a Connecticut-licensed physician, physician assistant or APRN who actively practices in the state with cosmetic training and experience, and procedures may be performed only by that practitioner or a registered nurse. An in-person assessment is required before each person's procedure, and the practitioners' names and specialties must be posted on site and online, given to each patient and included in advertising. The statute says nothing about who may own a med spa. Physician assistants need a written delegation agreement with annual review.

How We Structure It

As a rule we set up a professional 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 Connecticut the clinical entity has no other business, and the management arrangement is a fixed fee and not a share of profit or revenue.

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.