Montana Practice Structure Guide: A Repealed Statute, a Board Rule That Remains and the Strongest Physician Non-Compete Ban in the Series

Entity and Ownership

The Montana Professional Corporation Act in Title 35, chapter 4 governs. A professional service is one a licensed person may render and a corporation under the Business Corporation Act may not. A corporation has one profession plus ancillary services, and a bar on other business, and may be a promoter, partner, member or manager only of an enterprise engaged only in professional services or business permitted by its articles. Shares may go only to natural persons licensed in Montana or any other state, general partnerships of licensees and domestic or foreign professional corporations authorized in Montana, and the licensing authority may restrict that by rule. Violating shares are void. At least half the directors and officers, excluding secretary and treasurer, must be qualified, the annual report certifies qualification, and the corporation may not render services until it files its articles with each licensing authority, followed by an annual statement of qualification to the board. The name must include professional corporation or P.C. Services are rendered only through persons permitted to render them in Montana.

The Corporate Practice Position

The old statute on unprofessional conduct, MCA 37-3-322, was repealed in 1995, and a 1995 board rule cited by vendor guides, ARM 24.156.625, was repealed in 2022. The current rule is ARM 24.156.405(2)(m), which makes it unprofessional conduct to practice under a license issued by the board as the partner, agent or employee of, or in joint venture with, a person who does not hold an equivalent license. It does not prohibit a licensee or group incorporating as a professional corporation, or practicing as a partner, agent, employee or joint venturer of a licensed health care facility or other licensed provider if there is a written agreement that the relationship may not affect the licensee's independent judgment, the judgment is in fact not affected, and the licensee is not required to refer patients to a particular provider or supplier. The rule regulates the licensee's conduct and does not by its terms bar lay ownership of a business. It would chill a physician being an employee or agent of a lay MSO, and the written independent-judgment agreement is a useful drafting template. A statute also makes it unprofessional to assist unlicensed practice or let another use the licensee's license.

The Boards of Nursing and Barbers and Cosmetologists publish FAQs saying a person not licensed by a board may own a medical spa as a facility if qualified providers provide or supervise medical procedures. Those are non-binding guidance from other boards, and we found no Board of Medical Examiners statement reconciling them with the rule above. We found no Montana court decision or Attorney General opinion on the doctrine.

The Management Agreement and Fees

We searched the physician statutes and found no fee-splitting provision, and the board's rule lists abusive billing practices without addressing fee division. The rule's no-required-referral language is the closest. Montana's statute on health care provider covenants voids any term of a partnership, employment or other professional relationship with a covered provider, including physicians, that restricts after termination practicing in any geographic area for any period, or treating or soliciting current patients. It does not apply to a sale of a practice or to a declining repayment provision for loans, relocation or education, and it was amended three times in 2025, which we did not reconcile. Whether it reaches a covenant imposed on a practice in an MSO agreement is an open question. We found no transaction notice law.

Med Spa and Telehealth Rules

Montana has no statutory definition or facility license for med spas. The boards' FAQs say a salon license applies if cosmetology or esthetics services are provided and medical procedures must be separated by a partition. Estheticians cannot inject or do laser hair removal, nurses may inject prescribed medications under a treatment plan, and medical assistants need on-site or direct supervision for injections. We found no elective IV hydration guidance. Telemedicine is regulated at the in-person standard where the patient is located, and relationships may be established by telemedicine if the standard of care does not require in-person care, with a full Montana license required.

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 Montana the written independent-judgment agreement is part of every arrangement, and nothing requires referrals to a particular provider or supplier.

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.