New Mexico's healthcare regulatory landscape offers significant flexibility compared to many states. Unlike jurisdictions with strict Corporate Practice of Medicine prohibitions, New Mexico permits non-physician entities to employ physicians, provided they don't exercise undue influence over clinical decisions. This permissive approach, established through a 1987 Attorney General Opinion (No. 87-39), allows diverse ownership structures while protecting physician autonomy.
New Mexico recognizes three primary professional entity types for healthcare organizations: Professional Corporations under NMSA 1978, Chapter 53, Article 6 (the Professional Corporation Act), Professional Limited Liability Companies governed by NMSA 1978, Chapter 53, Article 19 (substantially revised through House Bill 281 in 2023), and Limited Liability Partnerships under NMSA 1978, Sections 54-2A-101 through 54-2A-1206. Notably, New Mexico does not provide statutory authority for Professional Associations (PAs) as a distinct healthcare entity type.
Professional Corporations represent the most established structure for New Mexico healthcare organizations. NMSA §53-6-4 authorizes licensed individuals to incorporate professional corporations, while NMSA §53-6-7 establishes that professional services must be rendered exclusively through licensed officers, employees, and agents.
Strict ownership restrictions apply. According to NMSA §53-6-9, shares may only be issued to licensed persons, and articles of incorporation must provide mechanisms for purchasing shares from disqualified persons when a physician loses licensure or leaves practice. Professional Corporations must include designators such as "Professional Corporation," "P.C.," "Limited," "Chartered," or "Professional Association" in their legal names per NMSA §53-6-6.
Professional LLCs provide an alternative structure with lower administrative burden. The Revised Uniform Limited Liability Company Act, enacted through House Bill 281 in 2023, modernized New Mexico's LLC framework. PLLCs must include "Professional Limited Liability Company" or the abbreviations "P.L.L.C." or "PLLC" in their legal names per NMSA §53-19-3.
The critical compliance advantage: while Professional Corporations must file biennial reports with the Secretary of State, New Mexico eliminated annual report requirements for LLCs entirely. This represents significant administrative relief for healthcare practices seeking to minimize ongoing compliance burden. All members must be licensed professionals authorized to provide the professional service.
LLPs operate under NMSA 1978, Sections 54-2A-101 through 54-2A-1206. Partners must comply with professional licensing requirements. Verify with legal counsel whether this statute covers LLPs as distinct from Limited Partnerships (LPs).
New Mexico does not have a Corporate Practice of Medicine (CPOM) doctrine. The 1987 Attorney General Opinion No. 87-39 established that non-physician entities may provide medical services through employed physicians, provided there's no undue influence over clinical decisions or exploitation contrary to public policy. The Professional Corporation Act allows incorporation for medical service provision, but entities cannot practice medicine directly or interfere with practitioner professional autonomy.
Professional Corporations file Articles of Incorporation specifying authorized shares, professional designation, and share purchase provisions for disqualified persons. Professional LLCs file Articles of Organization including name, registered office, registered agent, and principal place of business.
Your compliance burden depends on entity type. Professional Corporations must file biennial reports ($25 plus $1.95 online fee) and face corporate income and franchise tax obligations. Professional LLCs have no annual report requirement, representing substantial administrative relief.
Professional Corporations must file biennial reports with the Secretary of State by the 15th day of the fourth month following fiscal year close (April 15 for calendar-year entities) per NMSA Section 53-5-2. Filing costs $25 plus $1.95 online. Late filing triggers a $200 penalty per NMSA §53-5-7, with potential administrative dissolution after a 60-day grace period.
Professional LLCs have no recurring Secretary of State report filing obligation, a substantial compliance advantage.
The New Mexico Medical Board operates under the Medical Practice Act (Chapter 61, Article 6 NMSA 1978), regulating physician licensure and practice standards. Healthcare professional entities must maintain compliance with individual physician licensing requirements and corporate structure requirements under either the Professional Corporation Act or the Revised Uniform Limited Liability Company Act.
Physicians must complete 75 CME hours every three years per 16.10.4 NMAC, including education addressing pain management related to controlled substance prescribing.
Physician licenses renew every three years with a $600 renewal fee per 16.10.9 NMAC. Active licensure in good standing is required to practice medicine and maintain ownership eligibility in a medical practice entity under NMSA § 61-6-2. Professional Corporations must maintain mechanisms for purchasing shares from physicians who lose licensure or face disqualifying disciplinary action per NMSA § 53-6-14.
New Mexico law does not explicitly address multi-discipline ownership of healthcare professional entities. Statutes use singular "professional service," creating uncertainty about multi-discipline PCs. Seek advance regulatory guidance from relevant professional boards before formation.
Can non-physician entities employ physicians in New Mexico?
Yes. New Mexico does not have a Corporate Practice of Medicine doctrine. The 1987 Attorney General Opinion No. 87-39 confirmed that corporations organized by non-physicians may provide medical services through employed physicians, provided they don't exercise lay control of medical judgment or exploit the medical profession contrary to public policy. This makes New Mexico one of the more permissive states for healthcare corporate structures.
What happens to a medical practice entity if a physician owner's license lapses?
License lapse creates immediate compliance issues. NMSA §53-6-9 requires that shares in Professional Corporations may only be held by licensed professionals, and articles of incorporation must provide for purchasing shares from disqualified persons. When your license lapses or faces suspension, you become a disqualified person who cannot maintain ownership. Maintain buy-sell agreements establishing valuation methods and purchase timelines.
Do Professional Corporations and PLLCs have the same reporting requirements?
No, this is a significant compliance distinction. Professional Corporations must file biennial reports by the 15th day of the fourth month following the fiscal year end, with a $25 filing fee ($1.95 online convenience fee). PLLCs have no recurring Secretary of State report filing obligation. This makes PLLCs administratively simpler for practices focused on minimizing compliance burden.
What are the key differences between forming a PC versus a PLLC in New Mexico?
Formation fees differ: PCs pay $1.00 per 1,000 authorized shares ($100 minimum, $1,000 maximum), while PLLCs pay a flat $50 filing fee. Ongoing requirements differ substantially: PCs file biennial reports costing approximately $27 total, while PLLCs have no annual report requirement. Both require all owners to be licensed professionals and maintain registered agents in New Mexico.
Managing healthcare entity compliance across multiple states creates administrative burden that pulls resources from patient care. Between tracking biennial reports, maintaining registered agent services, and coordinating professional licensing requirements, compliance demands constant attention.
Discern provides comprehensive entity management designed for healthcare organizations navigating multi-state requirements. Our platform automates filing deadlines, provides registered agent coverage across all 51 jurisdictions, and ensures your New Mexico entities maintain good standing. Ready to simplify healthcare compliance? Book a demo with Discern today.
.png){kind=small}