Nebraska Practice Structure Guide: A 1905 Supreme Court Rule, a Strict Professional Corporation Act and a Referral-Based Fee Rule
Nebraska has the most permissive corporate practice history in this batch, with 1905 Supreme Court decisions holding a corporation may contract for physician services, but its professional corporation statute is strict if you form one.
Key Highlights
- A Nebraska professional corporation's shareholders must be individuals licensed in Nebraska to render the same service, with a regulating-board certificate required before shares are issued or transferred.
- State Electro-Medical Institute v. State (Neb. 1905) held that making contracts for licensed physicians' services is not practicing medicine, and we found no later authority overruling it.
- Section 38-179(2) bars dividing fees for bringing or referring a consumer, so a percentage tied to an MSO's patient generation faces more risk, which is our inference.
- A pathology decision sometimes cited as a corporate practice case is a shareholder and non-compete dispute.
Entity and Ownership
The Nebraska Professional Corporation Act defines a professional corporation as having as shareholders only individuals duly licensed or otherwise legally authorized in the state to render the same professional service, and treats professions that diagnose and treat humans as the same profession. Articles and a certificate of registration are filed by one or more Nebraska-resident licensed individuals. The corporation renders one type of service plus ancillary services, only through licensed officers, employees and agents, with clerks and technicians excluded. The name must contain professional corporation or P.C. Shares go only to registered individuals, no shares may be issued or transferred without a regulating-board certificate filed with the Secretary of State, and violating shares are null and void. A $25 certificate of registration certifies that all shareholders, directors and officers other than the secretary are licensed, is valid for one year and is not renewable, and a disqualified person must sever all employment and financial interests or the corporation risks forfeiture. The Act does not alter the right of licensed persons to organize as an LLC or other lawful form.
The Corporate Practice Position
We found no Nebraska statute prohibiting lay corporations from employing physicians or contracting for their services. In State Electro-Medical Institute v. State (Neb. 1905) the Supreme Court dismissed a quo warranto action against a foreign corporation that advertised and treated disease through licensed, employed physicians, holding that a corporation cannot itself practice medicine but making contracts and collecting compensation is not practicing medicine. In State Electro-Medical Institute v. Platner the same year it held such contracts are neither prohibited by statute nor against public policy and said any further regulation was for the legislature. A statutory annotation cites the first case for a narrower point. We found no later authority overruling or limiting them. A vendor page says Nebraska actively enforces the doctrine without verifiable authority, and a 2025 Supreme Court decision it cites is a shareholder redemption and non-compete dispute inside a pathology practice and not a corporate practice decision. Our practical reading is that Nebraska is permissive for contract structures, but the authority is old and thin.
The Management Agreement and Fees
Section 38-179(2) makes it unprofessional conduct to divide fees or agree to split fees received for professional services with any person for bringing or referring a consumer, with exceptions for a partner or employee, a landlord under a written agreement for rent based on gross receipts and a former partner or employee under a retirement plan or separation agreement. An MSO is not within those exceptions. The rule is referral-based, so it does not on its face reach a flat or percentage administrative fee, and an MSO that markets and generates patients and is paid a percentage of collections on them faces more risk, which is our inference and not authority. We found no Nebraska authority on percentage fees. A task-assignment exemption allows unlicensed persons to perform routine, recurring tasks that need no independent clinical judgment and have predictable minimal-risk results. Non-competes follow common law, and a 2026 law limits only healthcare staffing agencies. We found no transaction notice law.
Med Spa and IV Rules
Nebraska has no med spa statute, license or medical director mandate that we found. The Board of Nursing's non-binding advisory opinion says an order from a licensed practitioner, a physician, physician assistant or advanced practice nurse, is required for IV therapy including hydration after a documented assessment, and a nurse may not delegate IV administration to an unlicensed person. Compounding must follow the USP chapters. We found no board statement on peptides or compounded GLP-1s and could not confirm the final form of two 2026 bills on physician assistant liability and compounding.
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 Nebraska we do not rely on the 1905 cases to let the MSO touch clinical decisions, and the fee is for administrative services and not for patients it brings in.
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.
MedGrid MSO provides management services to independently owned practices; it does not practise medicine and does not direct clinical decisions. Requirements vary by state and by service, and change over time — nothing on this page is legal or medical advice. Talk to us or your own counsel before making a structural decision for your clinic.