If you're running a medical practice in Pennsylvania, compliance extends far beyond patient care. The state's mandatory two-phase approval process requires State Board of Medicine pre-approval taking 2-8 weeks that cannot be expedited, regardless of what you pay for faster Department of State processing. Pennsylvania's strict enforcement of the Corporate Practice of Medicine doctrine through comprehensive statutory authority and binding case law creates absolute requirements that all ownership interests and controlling authority reside exclusively with licensed physicians.
Pennsylvania recognizes several professional entity types for healthcare organizations. Professional Corporations (PCs) operate under 15 Pa.C.S. Chapter 29, Professional Associations (PAs) follow 15 Pa.C.S. Chapter 93, Professional Limited Liability Companies (PLLCs) are governed by 15 Pa.C.S. Chapter 88, and Professional Limited Liability Partnerships draw authority from 15 Pa.C.S. Chapter 81. Each structure requires all ownership interests to reside exclusively with licensed healthcare professionals, with regulatory implementation overseen by professional boards through 49 Pa. Code § 45.202.
Professional Corporations (PCs)
Professional Corporations operate under 15 Pa.C.S. Chapter 29, Sections 2901-2907. Section 2903 mandates that your professional corporation restrict services to one type of professional service. Ownership must be limited to licensed professionals, with 49 Pa. Code § 45.202 requiring State Board of Medicine approval for any corporate name.
Professional Limited Liability Companies (PLLCs)
PLLCs are governed by Pennsylvania's Uniform Limited Liability Company Act of 2016 through 15 Pa.C.S. Chapter 88. Section 8812 defines "professional company" requirements, restricting your purpose to rendering professional services with ownership limited exclusively to licensed professionals. Unlike standard LLCs, PLLCs face additional annual compliance requirements including an annual registration fee of $610 per member (minimum $500 total) due April 15.
Pennsylvania definitively enforces the Corporate Practice of Medicine doctrine through statutory authority, regulations, and binding case law. The Medical Practice Act of 1985 (63 P.S. § 422 et seq.) establishes foundational restrictions, implemented through State Board of Medicine regulations in 49 Pa. Code Chapter 16.
Two critical cases establish binding precedent: Warren J. Apollon, D.M.D., P.C. v. OCA, Inc. invalidated Management Services Agreements granting non-physician entities de facto control, while OCA, Inc. et al. v. Kellyn W. Hodges reinforced prohibitions against non-physician operational control. Your practice cannot grant non-physician entities substantive control over medical practice operations.
You'll navigate a mandatory two-phase approval process where State Board of Medicine approval (2-8 weeks) cannot be accelerated regardless of expedited processing fees paid to the Pennsylvania Department of State.
Registered agent maintenance
Every professional entity must maintain a registered agent with a Pennsylvania address. Discern provides registered agent services across all jurisdictions, ensuring continuous compliance.
Annual filing requirements
Professional Corporations file annual reports between January 1 and June 30 ($7 fee). Professional LLCs face two obligations: the annual report (January 1 through September 30, $7 fee) and the Certificate of Annual Registration due April 15 (minimum $500). Pennsylvania eliminated capital stock and franchise taxes in 2016.
Recent legislative changes
The Fair Contracting for Health Care Practitioners Act (Act 74 of 2024) limits noncompete covenants to a maximum of one year, effective January 1, 2025. Review all practitioner employment contracts to ensure compliance.
Your entity ownership requires direct coordination between professional entity compliance and individual physician licensing status. Suspended, revoked, or probationary licenses immediately disqualify physicians from entity ownership, requiring continuous license monitoring systems.
Physicians must complete 100 CME credit hours per two-year renewal cycle (AMA PRA Category 1), including 2 hours of child abuse recognition training. Licenses renew biennially by December 31 of even-numbered years ($360 fee).
Healthcare organizations expanding into Pennsylvania from other states must understand foreign registration requirements and CPOM restrictions before operating.
Pennsylvania enforces single-discipline ownership by default under 15 Pa. Cons. Stat. § 2922. Multi-discipline ownership requires explicit authorization from relevant licensing boards before formation.
Can non-physician entities own medical practices in Pennsylvania? No. Pennsylvania definitively enforces the Corporate Practice of Medicine doctrine through the Medical Practice Act of 1985 and binding case law. Warren J. Apollon, D.M.D., P.C. v. OCA, Inc. invalidated arrangements granting non-physician entities de facto control. All ownership interests must reside exclusively with licensed physicians in good standing.
What happens if a physician's license lapses or is suspended? Physicians with suspended, revoked, or probationary licenses are immediately ineligible for entity ownership under 15 Pa.C.S. Chapter 29 and 49 Pa. Code § 45.202. Your entity faces potential dissolution unless ownership transfers to licensed physicians in good standing. Implement real-time license monitoring for all physician owners.
What are the annual filing requirements? PCs file annual reports between January 1 and June 30 ($7 fee). PLLCs file annual reports by September 30 ($7 fee) plus the Certificate of Annual Registration due April 15 (minimum $500). Pennsylvania eliminated capital stock and franchise taxes in 2016.
Should I choose a PC or PLLC? Both require identical formation fees ($125) and Board pre-approval. The critical difference is ongoing costs: PCs pay $7 annually while PLLCs pay a minimum $610 per member. For multi-physician practices, PLLC costs scale with membership. PLLCs offer flexible management structures; PCs provide traditional corporate governance.
Pennsylvania's two-phase approval process, biennial physician license renewals, and ownership eligibility tracking create significant administrative burden. Discern automates your entire compliance workflow, with automatic tracking of physician license status and registered agent services across all jurisdictions.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today.
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