Indiana Practice Structure Guide: The Professional Corporation, the Iterman Decision and the 2027 Med Spa Registration

Entity and Ownership

Indiana's Professional Corporation Act lets health care professionals licensed by a board form a professional corporation to render services only they may lawfully perform. Shares may go only to individuals authorized to render the service, certain partnerships of such persons, other professional corporations and qualified trusts, and shares issued or transferred in violation are void. At least one shareholder must be Indiana-licensed, and directors and officers other than the secretary and treasurer must be qualified persons. The name must include professional corporation or an abbreviation, and only a professional corporation whose shareholders are all Indiana-licensed physicians may use medical in its name. Because the definition is multi-board, a nurse practitioner or physician assistant can co-own with a physician, which is our reading of the statute, so claims that Indiana requires 100% physician ownership overstate it.

The statute text we could read was a 2015 version. Secondary sources say a 2017 law repealed the old pre-registration with the licensing agency, so confirm the current filing step with the Secretary of State. Sources conflict on whether Indiana has a distinct PLLC, and we do not use one.

The Corporate Practice Position

In Iterman v. Baker (Ind. 1938) the Supreme Court held that it is unlawful for a corporation to practice medicine, that an unlicensed corporation cannot practice by employing a licensed physician, and that a physician may not take direction on diagnosis or treatment from a non-practitioner. The practice act excludes hospitals and health care organizations whose members, shareholders or partners are licensed physicians and similar providers, and says employment of a physician by such an entity is not unlawful if it does not direct or control the physician's independent medical judgment. We could not verify the current wording, since the text we read was from 2015. We found no Indiana Attorney General opinion or Board position on MSOs, and a vendor describes enforcement as thin and driven by disputes, diligence and malpractice cases.

The Management Agreement and Fees

Board rules bar a practitioner from sharing a professional fee with another practitioner unless that person is a partner, employee or professional corporation shareholder, or unless the patient consents and the division is proportional to services performed and responsibility assumed. They also say a practitioner shall not pay, demand or receive compensation for referring a patient, and they make a practitioner responsible for employees' conduct. We found no Indiana authority on percentage-of-revenue management fees, so Indiana should not be treated as having approved them.

Indiana requires 90 days' written notice to the Attorney General of certain mergers and acquisitions among health care entities when combined assets reach $10 million. A 2025 law added an exclusion for providers majority-owned by Indiana-licensed practitioners who routinely provide care in the practice and added ownership reporting to the Secretary of State starting January 1, 2026 for owners with 5% or more, with reported exclusions for entities that do not accept commercial payer reimbursement. We could not confirm whether a pure management relationship without equity counts as an acquisition, since the statute is described as reaching any agreement or activity that confers control, or whether a cash-pay practice is within the reporting exclusion. A 2025 law bans non-competes between physicians and hospitals and hospital systems and likely does not reach a cash-pay practice.

The 2026 Med Spa Registration Law

Senate Enrolled Act 282 adds a medical spa chapter effective July 1, 2026, with registration mandatory from January 1, 2027. A medical spa is a facility or practice that offers medical services, prepares, administers or dispenses prescription drugs for injection, and holds itself out as focused on cosmetic or lifestyle treatments, with named categories including weight loss, wellness, longevity, botulinum toxin and fillers, hair loss, hormone therapies, parenteral nutrient therapies and laser or energy devices. It excludes a physician's office and a facility otherwise licensed by the state, and neither term is defined. The responsible practitioner must have prescriptive authority and training, must be physically present for a sufficient amount of time, and must ensure each worker is licensed and trained. Serious adverse events must be reported to the board within 15 days, services may not be provided away from the office except for education, and advertising must comply with the state advertising statute. The enrolled text has no ownership restriction and does not require ownership disclosure. As of early October 2026 the Board had issued no substantive guidance on the physician-office exemption.

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 Indiana the physician-owned practice is registered as a medical spa where the definition applies, and the management agreement is a fixed fee for defined non-clinical services.

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.