Vermont Practice Structure Guide: Act 133, Its Nonclinical Services Safe Harbor and MSO Reporting Due March 2027

Entity and Ownership

Vermont's Professional Corporation Act governs, and the physician practice chapter lets a licensed physician own shares in a professional corporation. A nursing chapter lets a licensed registered or practical nurse own shares in a professional corporation that provides medical and nursing services, which is broader than North Dakota, South Dakota or Wyoming. Shares may be issued only to individuals authorized to render the professional service, certain employee stock ownership plans and certain partnerships of qualified persons, violating shares are void, and the licensing authority may restrict further by rule. At least half the directors and all officers other than the secretary and treasurer must be qualified, the annual report certifies it, and only qualified persons may be proxies. The name must contain professional corporation, professional association, limited or service corporation or an abbreviation. Articles state the corporation is a professional corporation with a professional purpose, and a certified copy goes to the Board of Medical Practice before services are rendered. The Act preserves the right to use any other form of business entity.

Act 133 of 2026

Before 2026 Vermont had no statute prohibiting corporate employment of physicians, and we found no court decision or Attorney General opinion applying the doctrine. Act 133, signed June 15, 2026 and effective July 1, 2026, adds a new chapter in Title 18 and targets private equity groups and hedge funds, not physician-owned MSOs as such. A private equity group or hedge fund involved in any manner with a health care facility doing business in Vermont may not interfere with provider judgment on tests, referrals, care plans, patient volume or hours, and may not exercise or be delegated control over clinical standards and staffing levels, medical record content, hiring or firing based on clinical competence, payer contracting parameters, prices, coding and billing or selection of medical equipment and supplies, and may not enter arrangements giving those powers. The safe harbor says unlicensed individuals or entities may provide nonclinical management, administrative or business services if a licensed provider retains the ultimate responsibility for or approval of those decisions and the services are not de facto control that affects clinical decision making or the nature or quality of care. An aggrieved provider has a private right of action for equitable relief, damages, costs and attorney's fees.

By March 1, 2027, each health care facility and each management services organization must file with the Green Mountain Care Board. If a private equity or hedge fund held an interest as of June 1, 2026, the filing is ownership and control detail, an organizational chart and the latest profit and loss and balance sheet. Otherwise it is an attestation that none held one. Nursing homes, staffing companies, federally qualified health centers and entities whose Vermont services are provided exclusively through telehealth are exempt from reporting. The MSO definition covers any entity that contracts with a provider or provider organization to perform management or administrative services, so a physician-founded MSO is covered by the reporting duty even with no private equity investor. Penalties for knowing failure to report run up to $50 a day, capped at $10,000 a year, and up to $25,000 per material misrepresentation. Open questions include whether a physician office is a health care facility, whether an out-of-state MSO must report and whether a non-private-equity MSO with outside capital could be swept into the private equity definition, which is broad. The introduced bill had an Oregon-style corporate practice ban and MSO contract limits, and the enacted Act dropped them, so commentaries describing a corporate practice codification or debt and dividend bans reflect the introduced text.

The Management Agreement and Fees

Vermont's discipline statute covers dividing or agreeing to divide fees received for professional services for any person for bringing or referring a patient, soliciting through agents, permitting one's name or license to be used by a person, group or corporation when not actually in charge of the care, delegating to unqualified persons and deceptive advertising. That is referral-based, and we found no authority on percentage fees. A statute from Act 177 of 2026, for contracts on or after July 1, 2026, voids any provision in a partnership, employment or other professional relationship with a health care provider that restricts practice in any geography for any period after the relationship ends, limits notice to former patients of a change of employment, restricts disparaging statements, is inconsistent with Vermont law or requires out-of-state litigation. It preserves restrictions that limit a provider who contracts with a third-party company for nonclinical business support services from opening a business within a specific territory supported by a different third-party company providing nonclinical services, which is an MSO-relevant carve-out. It has no owner exception. A hospital must notify the Attorney General 90 days before acquiring a medical practice, which does not apply to a physician-owned practice with an MSO and no hospital buyer.

Med Spa and IV Rules

Vermont has no med spa statute or medical director rule that we found. The Board of Medical Practice's 2013 motion treats lasers, pulsed light or other energy sources on living tissue as the practice of medicine. A joint statement of the medical, osteopathic, pharmacy and nursing boards on IV therapy clinics was approved in June 2024, and per press coverage it says IV therapy is the practice of medicine, all IV fluids are prescription drugs, added ingredients are compounding and customers cannot self-select from a menu. We read only its cover page. Discipline for delegating to unqualified persons and for questionnaire-only initial evaluations also applies.

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 Vermont the MSO provides only nonclinical services, a licensed provider approves every decision it touches, and the MSO files its March 2027 report.

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.