A single missed deadline can dissolve your Kentucky healthcare practice. You're juggling June 30 annual reports, quarterly LLET tax payments, 60-hour CME cycles, and ownership rules that disqualify you from pain management facilities the moment your license lapses. Miss the June 30 annual report deadline, and you face administrative dissolution. Let your CME lapse, and you could lose your ability to own a pain management facility. The complexity multiplies when you're managing multiple entities across different practice locations.
Kentucky gives you four entity structure options: Professional Corporations (PCs) under KRS Chapter 274, Professional Limited Liability Companies (PLLCs) under KRS Chapter 275, Professional Associations (PAs), and Limited Liability Partnerships (LLPs) under KRS Chapter 362. All must comply with Kentucky's strict physician ownership requirements and maintain continuous regulatory compliance.
Professional Corporations are the traditional structure you'll see for physician practices in Kentucky. Governed by KRS Chapter 274, specifically KRS 274.015, these entities must be formed exclusively by licensed physicians with ownership restricted to licensed physicians only.
Your Professional Corporation must include "professional service corporation" or "P.S.C." in its legal name. The governance structure follows traditional corporate requirements: KRS 274.015 mandates that at least half of your directors must be qualified persons (licensed professionals), and all officers except the secretary and treasurer must be qualified professionals.
You form a PC by filing Articles of Incorporation with the Kentucky Secretary of State. Annual compliance includes reports due June 30 each year and payment of the Limited Liability Entity Tax (minimum $175 for entities with $3 million or less in gross receipts).
Professional LLCs give you greater management flexibility than traditional corporations while maintaining robust liability protection. Governed by KRS Chapter 275, you must be a licensed professional to form a PLLC, and your entity remains subject to Kentucky's Corporate Practice of Medicine restrictions.
Your PLLC must include "professional limited liability company," "professional limited company," "PLC," or "PLLC" in its name per KRS 275.015. The management structure gives you more flexibility than PCs—you can choose either member-managed or manager-managed configurations while still complying with Kentucky's Corporate Practice of Medicine doctrine. You form a PLLC by filing Articles of Organization with the Secretary of State.
Professional Associations can be structured as either PCs under KRS Chapter 274 or PLLCs under KRS Chapter 275. Limited Liability Partnerships under KRS Chapter 362 provide an alternative for physician partnerships but offer less liability protection for malpractice claims, making them less common in healthcare.
Kentucky enforces the Corporate Practice of Medicine doctrine through comprehensive statutory and case law frameworks. KRS 311.560 prohibits anyone from practicing medicine without proper licensure. Since corporations cannot be licensed as physicians, they're prohibited from practicing medicine.
The foundational case Kendall v. Beiling, 175 S.W.2d 489 (Ky. 1943) established that corporations cannot practice professions requiring professional licensure and that licensed professionals cannot aid unlicensed entities in practicing the profession. Recent enforcement through Baptist Health Medical Group, Inc. v. Farmer (Ky. Ct. App. 2024) confirms CPOM remains actively enforced.
Management Services Organizations may provide billing, HR, facility management, and IT services, but they're strictly prohibited from controlling medical decisions or interfering with physician-patient relationships.
When you form your Professional Corporation or Professional Limited Liability Company in Kentucky, you'll follow specific procedures with precise fees and statutory requirements. Formation costs $40, with annual compliance costs of a minimum $190 ($15 annual report filing fee due June 30 each year, plus $175 Limited Liability Entity Tax). Your entity formation process must comply with KRS Chapters 274 (Professional Service Corporations) and 275 (Professional Limited Liability Companies), including requirements for registered agents, registered office addresses, and adherence to the Corporate Practice of Medicine doctrine requiring physician ownership and control.
Critical Finding: Kentucky requires no licensing board approval from KBML before you form your physician practice entity. This distinguishes Kentucky from states requiring pre-approval. The proper sequence involves obtaining your individual physician licensure first, then filing entity formation documents directly with the Kentucky Secretary of State without intermediary board authorization.
Your naming requirements vary by entity type but are strictly enforced. Professional Corporations must include "professional service corporation" or "P.S.C." in their legal name per KRS Chapter 274. PLLCs must contain one of the following: "professional limited liability company," "professional limited company," "PLC," or "PLLC" per KRS 275.015. All entity names must be distinguishable from existing registered names under KRS 14A.3-010. The Business Entity Search portal allows you to verify name availability before filing.
Your Kentucky healthcare entity faces multiple annual compliance obligations requiring careful calendar management and financial planning.
You must file your annual report by June 30 each year following the year of formation per Kentucky Secretary of State requirements. The filing fee is $15 (uniform for all entity types), and the penalty for non-compliance is administrative dissolution for domestic entities or revocation of authority for foreign entities.
The June 30 deadline is absolute. If you miss this deadline, you must file reinstatement applications, pay all outstanding fees, and obtain letters of good standing from both the Department of Revenue and Labor Cabinet.
Kentucky imposes the Limited Liability Entity Tax on all businesses with limited liability protection, including corporations, LLCs, and limited partnerships, per Kentucky Department of Revenue regulations.
The tax calculation follows a three-tier system. If your entity has $3 million or less in Kentucky gross receipts or profits, you pay a minimum LLET of $175. Entities with more than $3 million to $6 million in receipts apply a sliding scale formula. Entities exceeding $6 million calculate both 0.095% of Kentucky gross receipts and 0.75% of Kentucky gross profits, then pay the smaller amount.
Your annual tax return and first quarter estimated payment are both due on the 15th day of the fourth month following the close of your taxable year (April 15 for calendar-year entities). Additional quarterly estimated payments are due on June 15, September 15, and December 15.
Kentucky enacted significant healthcare compliance changes between 2024-2026. HB 695, enacted March 27, 2025, reinstates prior authorization requirements for behavioral health services to January 1, 2020 standards. SB 27, enacted March 25, 2025, establishes the Kentucky Parkinson's Disease Research Registry requiring health facilities and licensed providers to report Parkinson's disease cases beginning January 1, 2026.
Your physician licensing requirements create direct legal connections to healthcare entity ownership eligibility, particularly for pain management facilities, requiring careful coordination between individual licensure maintenance and entity compliance.
The Kentucky Board of Medical Licensure regulates your individual physician licensure exclusively. KBML's statutory mission focuses on ensuring only qualified professionals are licensed and overseeing compliance with the Medical Practice Act—a mandate directed at individual practitioner licensure rather than business entity regulation.
You obtain your medical licensure through KBML before forming professional entities. Various license types are available per KBML's licensing categories. However, no board approval, certificate, or authorization from KBML is required between individual licensure and entity formation.
You must complete 60 hours of CME every three years for license renewal per 201 KAR 9:310. A minimum of 30 hours must be AMA or AOA Category 1 credits accredited by ACCME or AOA, while the remaining 30 hours may be fulfilled with either Category 1 or Category 2 credits.
The current three-year cycle runs January 1, 2024 through December 31, 2026, with renewal deadline of March 1, 2026. Standard renewal fees are $150, with an additional $50 late penalty for renewals between March 1 and April 1, 2026.
If you prescribe controlled substances, you must complete an additional 4.5 hours of Board-approved Category 1 CME related to KASPER, pain management, or addiction disorders within each three-year renewal cycle. If you prescribe buprenorphine, you need an additional 12 hours of Category 1 CME specific to addiction medicine every three-year cycle.
Kentucky law creates a direct legal connection between maintaining your active medical license and your eligibility to own healthcare entities. According to KBML's summary of House Bill 1, only a physician holding a full active license to practice medicine in Kentucky may own or have an investment interest in a pain management facility.
This requirement means if your license becomes inactive, restricted, suspended, or non-renewed, you're legally disqualified from maintaining ownership interests in pain management facilities specifically. The compliance pathway flows directly: failure to complete required CME leads to license non-renewal or restriction, which triggers automatic disqualification from maintaining facility ownership in pain management facilities.
You cannot co-own a professional medical entity with nurse practitioners, physician assistants, or other non-physician healthcare professionals within a single professional service corporation or professional limited liability company. Under Kentucky Revised Statutes Chapter 274 and Chapter 275, professional entities must restrict ownership to individuals authorized to render the specific professional service for which the corporation or LLC is organized.
However, you can structure compliant multi-discipline healthcare arrangements through alternative approaches: physician-owned entities that employ nurse practitioners and physician assistants, separate coordinating legal entities for different disciplines, or management services organizations that provide administrative services while preserving physician control over medical decision-making.
Permitted structures include physician-only PSCs that employ nurse practitioners and physician assistants through employment relationships (not ownership), or separate legal entities where a physician PSC and an NP nursing practice operate under contractual coordination agreements.
Yes, but with important limitations. Baptist Health Medical Group, Inc. v. Farmer (Ky. Ct. App. 2024) confirms that hospitals may employ physicians in Kentucky. However, these arrangements must maintain physician clinical autonomy and cannot interfere with medical decision-making. Management Services Organizations may provide administrative services but are strictly prohibited from controlling medical decisions, interfering with physician-patient relationships, making clinical judgments, or supervising physicians on clinical matters per Chapman and Cutler LLP's analysis.
License lapse creates immediate compliance issues for healthcare entity ownership. For pain management facilities specifically, Kentucky administrative regulations require that only physicians holding full active licenses may maintain ownership interests. If your license becomes inactive, restricted, suspended, or non-renewed, you're legally disqualified from maintaining these ownership interests. Beyond ownership disqualification, your entity itself may face regulatory scrutiny and potential administrative action. Professional Service Corporations under KRS 274.015 require that at least half of directors be qualified persons (licensed professionals) and all officers except secretary and treasurer be qualified persons. License lapse by key shareholders could trigger governance non-compliance, requiring immediate ownership restructuring or entity dissolution.
Professional Corporations and Professional LLCs differ primarily in governance structure, management flexibility, and operational complexity. PCs follow traditional corporate structure with board of directors, officers, and formal governance requirements under KRS Chapter 274. At least half of directors must be licensed physicians, and all officers (except secretary and treasurer) must be qualified professionals. PLLCs under KRS Chapter 275 offer flexible management structures allowing member-managed or manager-managed configurations with simpler governance. Both face identical formation costs ($40), annual report requirements ($15 by June 30), and minimum LLET obligations ($175 for entities under $3 million). PLLCs generally provide greater operational flexibility, making them increasingly popular among physician groups.
Yes, absolutely. You must file your annual report by June 30 each year following the year of formation per Kentucky Secretary of State requirements. The filing fee is $15 (uniform for all entity types). The penalty for non-compliance is severe: administrative dissolution for domestic entities and revocation of authority for foreign entities. There are no exceptions to this requirement for healthcare entities. If you miss the June 30 deadline, you must file reinstatement applications, pay all outstanding fees, and obtain letters of good standing from both the Department of Revenue and Labor Cabinet before reinstatement.
No. You cannot co-own a professional medical entity with nurse practitioners, physician assistants, or other non-physician healthcare professionals within a single professional service corporation or professional limited liability company. KRS Chapter 274 requires professional service corporations to restrict ownership to individuals authorized to render the specific professional service for which the corporation is organized. Physicians practice medicine under KRS Chapter 311 while nurse practitioners practice under nursing statutes, meaning they are not providing the "same professional service" for ownership purposes. Compliant multi-discipline practice structures include physician-only PSCs that employ nurse practitioners (employment relationship, not ownership), or separate legal entities where a physician PSC and an NP practice operate under contractual coordination agreements. The Kentucky Board of Nursing confirms nurse practitioners may own their own nursing practices, but this does not extend to co-owning physician medical practices.
The overwhelming burden of Kentucky healthcare compliance—tracking June 30 annual report deadlines across dozens of entities, calculating quarterly LLET payments, coordinating CME renewals that affect ownership eligibility—creates constant risk of missed deadlines and administrative dissolution. You must ensure compliance with annual report filing deadlines (June 30 in Kentucky), maintain required registered agent services, manage entity-specific payment obligations including the Limited Liability Entity Tax (minimum $175 annually for entities under $3 million in gross receipts), and maintain visibility of compliance deadlines including annual reporting ($15 fee) and physician continuing medical education requirements (60 hours per 3-year cycle) that directly affect your entity ownership eligibility.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today and see how we can reduce your administrative burden while ensuring your Kentucky entities stay in good standing.
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