Most corporate practice provisions talk about control. Maryland’s talks about employment, which is harder to draft around.
§ 14-301 of the Health Occupations Article provides that an individual shall be licensed by the Board before that individual may practice medicine in Maryland. Only a natural person can hold the licence, so a corporation, association or partnership cannot itself practice medicine or employ physicians to provide professional medical services. Maryland follows the common-law corporate practice doctrine, and it is understood to reach professional service corporations and limited liability companies as well.
Why the employment clause bites harder
A prohibition on interfering with clinical judgment can be managed with careful drafting: reserve clinical decisions to the physician, and the arrangement survives on paper. A prohibition on employing physicians to provide professional medical services is a question about the employment relationship itself, and no recital fixes it.
So in Maryland the structural question is not only “who decides?” It is “whose payroll is the physician on, and for what?”
What non-licensees actually do here
The management services organization, and in Maryland it is doing real work rather than being one option among several. The MSO employs the non-clinical staff, holds the premises and the equipment, provides the technology, marketing and billing operations, and is paid a fixed fair-market fee. The physicians are not its employees for the delivery of medical services.
Every clause that blurs that line — the manager hiring or directing clinical staff, the manager setting the treatment menu, compensation that behaves like a share of clinical revenue — moves the arrangement toward the thing § 14-301 is read to foreclose.
A Maryland-specific review list
- Who employs the physicians, and under what agreement?
- Who employs the clinical staff delivering medical services?
- Does the management fee behave like a fee for services, or like a share of clinical collections?
- Who controls the treatment menu and the protocols?
- Would the arrangement read the same way to a regulator as it does to your investors?
It sits alongside the laser rule
Maryland pairs this ownership provision with an unusually strong characterization of treatment: the Board of Physicians treats laser hair removal as a surgical act. Together they narrow both who may own the business and who may perform the work, which is a tighter combination than most states apply.
Related reading
Frequently asked questions
Can a corporation employ a physician in Maryland?
Not to provide professional medical services. § 14-301 licenses only individuals to practice medicine, so a business entity may not practice or employ physicians to provide those services.
Does that include an LLC or a professional service corporation?
Maryland’s common-law doctrine is understood to reach professional service corporations and limited liability companies as well.
How do non-licensees participate?
By owning a management services organization that provides administrative and business services for a fixed fair-market fee.
Is a management fee based on a percentage of revenue safe here?
It is the highest-risk formulation in any corporate practice state, and Maryland’s prohibition is unusually direct. Use fixed fair-market fees and take counsel.
General information about Maryland practice structure, not legal advice. Confirm your obligations with healthcare counsel licensed in Maryland.