Who can own a pain management clinic is a question that comes up when a physician wants to open a practice, when an investor or management company wants to buy in, or when a nurse practitioner, chiropractor, or non-physician entrepreneur wants to expand into interventional services. The answer depends heavily on the state, the services offered, and how the clinic prescribes. Pain management also carries an extra layer of regulation in some states because of the history of so-called "pill mills."

This article gives a general overview of the ownership frameworks that commonly apply, with Texas as an example, and the questions to raise with an attorney licensed in your state.

Key takeaways

• Many states limit non-physician ownership of medical practices through the corporate practice of medicine doctrine, though the rules vary widely.

• Several states have separate pain clinic laws, and some of them include specific ownership, medical director, and registration requirements.

• In Texas, a clinic that meets the statutory definition of a pain management clinic must be certified by the Texas Medical Board and owned and operated by a qualifying physician medical director.

• Management services organizations are common in pain management but must be structured carefully under state and federal law.

• Laws vary by state, so ownership questions should be reviewed by an attorney licensed where the clinic operates.

Who can own a pain management clinic? Two layers of rules

When physicians ask about pain clinic ownership, two separate legal frameworks are usually involved.

Corporate practice of medicine

The corporate practice of medicine doctrine, often shortened to CPOM, generally reflects the idea that only licensed physicians should control medical decisions. In states with strong CPOM rules, lay corporations and non-physician individuals typically cannot own a medical practice or employ physicians to provide medical services. Other states have weaker rules or broad exceptions. The doctrine comes from statutes, medical board rules, court decisions, and attorney general opinions, so it can be hard to pin down without local counsel.

State pain clinic laws

Separately, a number of states adopted pain clinic statutes in response to concerns about inappropriate opioid prescribing. These laws may require registration or certification, set ownership limits, require a physician medical director, impose on-site presence requirements, or bar ownership by people with certain disciplinary or criminal histories. Florida and Texas are frequently cited examples, and several other states have their own versions.

Texas as an example

Texas regulates pain management clinics under Chapter 168 of the Texas Occupations Code, and the Texas Medical Board administers the certification program. At a general level:

Which clinics are covered

The statute defines a pain management clinic based on prescribing patterns, focusing on facilities where a majority of patients are issued monthly prescriptions for opioids, benzodiazepines, barbiturates, or carisoprodol. Many interventional practices that primarily perform procedures may not meet that definition, and the statute and board rules list exemptions, including certain hospital-affiliated and academic settings and certain physician-owned specialty practices. Whether a particular clinic is covered is a fact-specific question.

Ownership and operation

For clinics that are covered, the statute provides that the clinic must be owned and operated by a medical director who is a physician practicing in Texas under an unrestricted license, and the clinic must hold a certificate before it operates. The law also addresses on-site presence and patient file review by the owner or operator, and it restricts ownership by people with certain criminal or controlled-substance disciplinary histories.

Why this matters for investors

Because of these requirements, an investor, management company, or non-physician clinician generally cannot simply buy a covered Texas pain clinic outright. Arrangements involving outside capital in Texas often use management structures, and those structures need careful review. Texas also has a strong corporate practice of medicine tradition, which affects pain practices whether or not they meet the pain clinic definition.

Common ownership models in pain management

Pain practices use a range of structures. Each raises different questions.

Physician-owned professional entity

One or more physicians own a professional corporation or professional limited liability company. This is the most straightforward model. Key issues are governance, how new physician owners are admitted, and what happens when an owner leaves.

Physician-owned practice with a management services organization

A physician-owned practice contracts with a management services organization, or MSO, that provides non-clinical services such as billing, staffing, marketing, and real estate. The MSO may be owned by investors. The management agreement, fee structure, and any controls over the physician entity are typically the focus of regulatory review.

Hospital or health system ownership

Some pain programs are owned by hospitals or health systems, which may be exempt from certain pain clinic requirements depending on the state.

Ambulatory surgery center ownership

Many interventional pain physicians perform procedures in ambulatory surgery centers, and some hold ownership interests in them. ASC ownership raises its own licensing, accreditation, and federal safe harbor questions under the Anti-Kickback Statute.

Arrangements involving advanced practice providers

Nurse practitioners and physician assistants play a large role in many pain practices. Their ability to own an interest, prescribe controlled substances, or practice without physician involvement depends on state law and the clinic's structure.

Federal considerations

Even when state ownership rules are satisfied, federal rules can affect how a pain clinic is set up. At a general level, the Anti-Kickback Statute and the physician self-referral law may apply to arrangements involving referrals for services paid by federal healthcare programs, such as ancillary services, ASC interests, or compensation structures. DEA registration requirements also apply to each location where controlled substances are prescribed or stored. A healthcare attorney can explain whether a proposed structure raises these issues.

Questions to ask before you buy, open, or invest

Bring these questions to a conversation with an attorney licensed in your state:

1. Does our state have a pain clinic law, and would our clinic meet its definition?

2. Who is permitted to own the practice entity under our state's corporate practice rules?

3. What registration, certification, or medical director requirements apply?

4. If we use an MSO, which management terms tend to draw regulatory concern?

5. How do supervision and delegation rules apply to our advanced practice providers?

6. Do any federal rules affect our ancillary services or ASC relationships?

7. What happens to our certification or registration if ownership changes?

Ownership structure also affects how a buyer views the practice later, which we discuss in how to increase the value of your medical practice before you sell.

Frequently asked questions

Can a non-physician own a pain management clinic?

It depends on the state and the type of clinic. Many states restrict non-physician ownership of medical practices, and some pain clinic laws add specific physician ownership requirements.

Does every pain practice in Texas need a pain clinic certificate?

No. The Texas requirement applies to clinics that meet the statutory definition based on prescribing patterns, and the law lists exemptions. Whether a clinic is covered is a fact-specific question for an attorney licensed in Texas.

Can a nurse practitioner own a pain clinic?

The answer varies by state and depends on scope-of-practice rules, controlled-substance prescribing rules, and any pain clinic statute.

What is an MSO in pain management?

A management services organization provides non-clinical business services to a physician-owned practice. It is commonly used when outside investors are involved, but it must be structured to comply with state and federal law.

Does changing ownership affect a pain clinic certificate?

In some states, yes. Texas pain clinic certificates are not transferable, so ownership changes should be reviewed in advance.

Request an introduction

Request an introduction to an independent business attorney who works with pain management practices. Learn more about business and legal planning for pain practices. Call or text (972) 616-4581, or contact us. The form goes to [email protected].

This article is general information, not legal advice. PPP is an introduction service and is not a law firm. Please read our disclaimer.