Massachusetts Practice Structure Guide: The Professional Corporation, Board Rules and State Transaction Review

Entity and Ownership

The professional corporation under G.L. chapter 156A is the form to use. It is organized with a certificate from the licensing board, the Board of Registration in Medicine for physicians, that the incorporators, president, vice presidents, a majority of directors and every shareholder are licensed. Shares may be held only by licensed natural persons, qualifying partnerships of such persons and certain other professional entities, and transfers in violation are void. A majority of directors and all officers other than treasurer, clerk, secretary and their assistants must be licensed. The name needs a corporate ending such as P.C. and a PC is generally limited to one profession plus ancillary services. Massachusetts has no P.A. or S.C. form for physicians.

Board regulation 243 CMR 2.07(22) lists the forms through which a physician may practice: a professional corporation, certain nonprofit and hospital service corporations, an LLC or partnership whose terms do not limit the licensee's liability for negligence, and similar out-of-state entities, plus employment by a licensed health care facility. A general business corporation is not listed.

The Corporate Practice Position

Massachusetts is a corporate practice state through older case law and the Board's regulation. A law-firm summary of the 2012 regulation says the case law behind the prohibition is more than fifty years old, and another firm reports that only licensed physicians and certain nurse practitioners may own a medical practice. We could not verify the case commonly cited as the source, so we do not cite it, and we found no reported Attorney General or Board action aimed at a lay-owned practice.

Clinic licensure is a separate pressure point. A 2013 Department of Public Health advisory, which we reached only through a summary, says a med spa must hold a clinic license unless it is wholly owned and controlled by its practitioners, and that names do not matter. An MSO that holds equity or control in the clinical entity risks pushing the practice outside that exemption, which is another reason ownership stays with the physician.

The Management Agreement and Fees

We found no express fee-splitting or referral-fee ground in the Board regulations we read, and no Massachusetts statute or Board policy capping a percentage management fee. The state kickback statute is written around payments by health care insurers, so by its terms it does not clearly reach a pure cash-pay practice, which is our reading. The regulations bar delegating medical services to someone not licensed for them, require records for at least seven years from the last encounter and restrict advertising. Commentators advise that payment flow to the practice, which then pays the MSO for services without referral-based splitting.

Physician non-competes are void and unenforceable by statute.

State Transaction Review

The Health Policy Commission reviews material changes in health care entities on 60 days' notice, with filing thresholds set by regulation. Chapter 343 of the Acts of 2024 defined a management service organization as a corporation providing management or administrative services to a provider or provider organization for compensation, and extended registration to MSOs and significant equity investors. The Commission amended its regulations in April 2026, and proposed thresholds were $25 million of net patient service revenue for clinical affiliations and a $10 million increase for mergers and acquisitions. The Commission said it would clarify that the MSO trigger applies to MSOs that support negotiating payer contracts. A summary of the proposal says individual licensed professionals who own their practice are excluded from the definition of significant equity investor, but we could not confirm that survived in the final rule. A start-up physician-owned practice with a management company and no outside investor looks unlikely to file, and that conclusion should be confirmed against the current regulation.

Med Spa and Aesthetic Rules

Massachusetts has no med spa license. A 2026 bill as filed would have licensed med spas, but the committee's May 2026 replacement draft only directs the Department of Public Health to report by the end of 2027, and it was in House Ways and Means with no later action as of this writing. Secondary sources report that the cosmetology board clarified in 2025 that its licensees cannot perform injectables or most lasers, even under physician delegation.

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 Massachusetts we also keep the management company free of investors who would make the arrangement look like a significant equity investment.

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.