As a rule, we set up a PC, or the state's equivalent (a professional association or a service corporation, depending on the state). Period. We do not set up PLLCs in any state, whether or not the state enforces the corporate practice of medicine. The PC is the most durable structure, and it is the one every clinic in the MedGrid network runs on.
Network Compliance Guidance
Why MedGrid Clinics Operate as a PC, Not a PLLC
One structure, in every state. Share this with your own attorney and accountant before acting.
Why a PC
It Matches Who Owns the Clinic
A PC is the entity physicians, MDs and DOs, use to own a practice. Every MedGrid clinic is physician-owned, so the PC is the structure that actually matches the ownership. A PLLC is the entity RNs and other non-physician licensed professionals tend to use, which makes it the wrong tool for a physician-led practice.
It Carries the Fee-Splitting and Clinical-Control Framework
A PC's governing law is written around licensed ownership and professional judgment. That framework is exactly what corporate-practice and fee-splitting rules look for, and a PLLC's governing statute generally does not build it in the same way.
One Playbook in Every State
The PC statute is far more uniform than PLLC rules, which vary widely on permitted ownership, name endings and board notification. One structure means one compliance playbook, one governance model, one set of rules for payroll, banking and credentialing across the whole network.
It Is the Structure That Sticks
The PC is what boards, insurers, banks and buyers expect to see. It does not need to be re-papered when a state tightens, when you add a location or when someone examines it, which makes it the most durable choice.
How the Money Moves in a PC
About 32 states plus D.C. recognize some form of the Corporate Practice of Medicine (CPOM) doctrine, a rule that bars non-physician-controlled entities from employing physicians, billing for medical services, or profiting directly from clinical fees. That is the core legal reason the money in a PC moves in a specific order.
Revenue Lands in the PC's Own Account First
All professional fees are billed under the PC's tax ID and NPI and deposited directly into a bank account owned solely by the PC, never into a management company's or investor's account.
The PC Pays a Management Fee, for Nonclinical Services Only
If a management services organization (MSO) handles administrative work such as billing, scheduling, facilities and marketing, the PC pays it a contracted fee that reflects the fair market value of the services actually delivered. It cannot be a percentage of clinical profit or a disguised profit share.
The PC Compensates Physician-Shareholders for Clinical Work
Physicians are paid for the medical services they personally provide, and any remaining earnings stay with the PC as corporate profit, retained by the licensed entity and not distributed to non-licensed owners or managers.
Revenue in, management fee out, physician pay out, profit stays.That one-directional order keeps clinical fee revenue under the control of a physician-licensed entity, which is what CPOM statutes require. It also avoids fee-splitting: sharing clinical fee revenue with a non-licensed party is independently prohibited in most CPOM states regardless of entity type.
PC vs. PLLC at a Glance
| PC | PLLC | |
|---|---|---|
| Matches Physician (MD/DO) Ownership | ✓ | RN-oriented |
| Built-In CPOM and Fee-Splitting Framework | ✓ | ✗ |
| Same Rules Across Every State We Operate In | ✓ | ✗ |
| What MedGrid Sets Up | ✓ | ✗ |
How the Medical Director and the Management Company Get Paid
Two separate payments move out of the PC's bank account, and both are fixed, documented, fair-market-value payments for defined work, never a share of revenue, a per-patient commission or a percentage of collections. The management company then pays MedGrid a fixed monthly retainer of its own.
A Fixed Stipend or Salary
The PC pays its Medical Director a fixed stipend or salary under a written agreement, for defined oversight duties (protocol review, supervision, quality and compliance sign-off). It is set at fair market value and does not move with patient volume, collections or profitability.
A Fixed Management Transfer
The PC transfers a fixed monthly amount to the management services company (the LLC) under a written Management Services Agreement, for defined nonclinical services. It is a flat amount or documented cost-plus rate, not a percentage of the PC's revenue or profit. The LLC then pays MedGrid a fixed monthly retainer, invoiced against a written scope.
No Revenue Share, No Commission
Neither payment is a cut of collections, a per-visit or per-procedure commission, or a share of clinical profit. Both are set and documented independently of how much the clinic bills, which is the legal test that separates a compliant management fee from prohibited fee-splitting.
Is Your Clinic Set Up the Right Way?
Tell us your state and your service menu. We tell you what structure you need, what it costs, and what has to change in the clinic you are running today.
MedGrid network compliance guidance. Share with your clinic's attorney and accountant before acting. This is general information, not legal or tax advice.