New Mexico Practice Structure Guide: A Permissive Attorney General Opinion, Narrow Fee-Splitting and a Hospital-Focused Oversight Act

Entity and Ownership

The New Mexico Professional Corporation Act, in the version we could read, forms a professional corporation to render one professional service only, limits shareholders to individuals licensed in New Mexico to render that service, and requires licensed incorporators. It may render services only through licensed officers, employees and agents, with support staff excluded. Shares may be issued and transferred only to licensed persons, with limited exceptions for transfers by operation of law, revocable trusts of a licensed grantor and qualified employee benefit plans. The name must contain limited, chartered, professional association or professional corporation or an abbreviation. We found no board certificate requirement and could not confirm the Act's currency after January 2024.

The Corporate Practice Position

New Mexico's position rests on Attorney General Opinion 87-39 of 1987. It concludes that a corporation organized and controlled by non-physicians may provide medical services through employed physicians unless prohibited by statute or it exercises lay control of medical judgment or engages in lay exploitation of the medical profession in a manner prohibited by public policy. It reasons that the Medical Practice Act is silent, that the legislature banned corporate practice expressly for dentists and podiatrists but not physicians, and that a categorical denunciation is not warranted. It warns that an entity may not exert lay control of professional medical judgments and cites the aiding-and-abetting and license-use provisions and a Texas decision in which a lay manager took two-thirds of a doctor's net profits. An Attorney General opinion is persuasive and not binding, and we found no New Mexico appellate case on lay control. Practicing without a license is a fourth-degree felony, and the discipline statute covers aiding unlicensed practice and permitting use of a license. We found no enforcement action against an MSO.

The Management Agreement and Fees

The discipline statute defines fee splitting as offering, delivering, receiving or accepting any unearned rebate, refund, commission, preference, patronage dividend, discount or other unearned consideration as compensation or inducement for referring patients, regardless of any ownership interest, and the Attorney General's opinion says prohibited fee splitting is limited to conduct in the nature of referral fees. That is the most MSO-friendly fee definition in this series, but the lay-control limit still applies, so a fee that gives the MSO control of clinical decisions is the risk. We read the current wording only through a reproduction.

Board rules prohibit prescribing without an established relationship, including based solely on an online questionnaire, with a telehealth exception requiring a face-to-face videoconference encounter, history, consent and a record. Records must be retained ten years, may not be withheld for unpaid bills, and the patient must receive a written records policy naming the responsible entity, including where an employer or MSO holds the records. Public communications offering cosmetic procedures must identify the responsible physician. A health care practitioner agreements law makes most physician non-competes unenforceable, and its details come from secondary summaries.

Consolidation Oversight

The Health Care Consolidation Oversight Act, effective July 1, 2025, requires Health Care Authority approval before a covered transaction closes, with review of up to 120 days and fines up to $5,000 per instance, higher if willful. Covered transactions center on hospitals, including affiliations or contracts with a management services organization defined as an entity providing all or substantially all administrative services under contract with a hospital, and acquisitions of independent practices by a provider organization owned or affiliated with a health insurer. A stand-alone cash-pay clinic MSO is not covered unless it is hospital- or insurer-affiliated, and we did not check the implementing rules. Senate Bill 450 of 2025 would have barred any health care entity including an MSO from controlling clinical decisions, records, clinical hiring and firing, payer contracts, coding and billing, with a private right of action, and trackers show it did not advance. A 2026 draft that would have barred private equity involvement in provider decisions was reportedly postponed indefinitely in February.

Cosmetic Device and Med Spa Rules

New Mexico has no med spa statute or facility license. Board rule NMAC 16.10.13 treats cosmetic devices including lasers and IPL as the practice of medicine, lets a certified medical assistant use only non-incisive, non-ablative devices with the supervising physician immediately available on the premises, and requires the physician to provide history, exam, diagnosis, treatment protocol and a medical record before treatment. It bars delegating injection of cosmetic or aesthetic substances to medical assistants, and the rule copy we read shows amendments only through 2008. Board guidance from 2024 and a reported September 2025 revision, which we could not read, address delegation to estheticians and cosmetologists, and the two conflict, so treat the 2025 change as unconfirmed. The Board's IV therapy policy treats IV therapy as the practice of medicine, and we did not read it.

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 New Mexico we do not rely on the permissive opinion to give the MSO any role in clinical decisions, and the responsible physician is identified in every cosmetic communication.

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.