About 5 percent of chiropractors practice alongside an MD or DO, and those practices collect roughly three times what DC-only practices collect. The structure that makes it legal is the part nobody explains.
Key Takeaways
- The corporate practice of medicine doctrine is state law, not federal. California’s Business and Professions Code Section 2400 states flatly that corporations and other artificial entities have no professional rights, privileges, or powers.
- Some states permit mixed-license ownership directly: California allows a chiropractor to hold up to 49 percent of a professional medical corporation, and Michigan amended its business entity laws in 2023 to permit multidisciplinary practices among physicians, podiatrists, and chiropractors.
- The MSO model separates a physician-owned professional entity from a DC-owned management company. The management fee must be fair market value and commercially reasonable, and the MSO cannot control clinical judgment.
- Structures fail on operations, not on paperwork – commingled bank accounts, undocumented services, and a fee that moves with medical revenue are what turn a legal structure into a regulatory problem.
Roughly one chiropractor in twenty practices alongside a medical physician. The 2025 Chiropractic Economics Salary and Expense Survey found that about 5 percent of respondents were part of an integrated practice with an MD or DO on staff, another 8 percent worked in a multidisciplinary clinic with other complementary practitioners, and almost 57 percent were still solo. The same survey reported the number that explains why so many are looking at integration: integrated practices collected an average of $856,667, multidisciplinary practices $650,286, and DC-only practices $269,303.
That spread is the entire commercial case, and it is why the seminar circuit never runs out of audiences. What the seminars tend to skip is the legal architecture underneath. The structure that lets a chiropractor build and own a business that delivers medical services is not a formality you paper over after the fact. It is state-specific, it is the thing most likely to unwind the venture in year two, and it starts with a doctrine most DCs have heard of and few have read.
The corporate practice of medicine doctrine holds that unlicensed persons and business entities may not practice medicine or employ physicians to do it. California states the principle about as bluntly as a statute can: under Business and Professions Code Section 2400, corporations and other artificial entities shall have no professional rights, privileges, or powers. The Medical Board of California explains that the prohibition exists to prevent unlicensed persons from interfering with or influencing a physician’s professional judgment. That purpose – protecting clinical judgment from commercial pressure – is the interpretive key to everything that follows.
What the Doctrine Actually Prohibits
The doctrine is not a ban on chiropractors making money from medical services. It is a ban on non-physicians controlling medical decisions. In practice, regulators look at a defined set of decisions and ask who holds them: who determines the diagnosis and treatment plan, who sets the standard of care, who decides how many patients a physician sees in a day, who has authority to hire and terminate the physician, who owns the medical records, and who sets the fees charged for medical services.
The doctrine varies dramatically by state, and the variation is not a matter of degree. Kansas, for example, takes a strict line: the Kansas State Board of Healing Arts explains that a general business entity may not engage in a learned profession such as medicine, chiropractic, law, or dentistry, either by employing or contracting with a licensee in that profession. Other states have moved the other direction. California’s Moscone-Knox Professional Corporations Act permits mixed-license ownership within a professional medical corporation, with at least 51 percent of shares held by licensed physicians and up to 49 percent held by other specified licensees, chiropractors among them. Michigan amended its business entity laws in 2023 to allow multidisciplinary professional entities among physicians, podiatrists, and chiropractors. A handful of states permit broad multi-service professional corporations outright.
There is no national answer and no template that works everywhere. A structure that is routine in one state is an unlicensed practice problem one state line over.
The Two-Entity Model, in Plain Terms
Where direct ownership is not available, the standard answer is two entities. A professional entity – a professional corporation or professional LLC, depending on the state – is owned by a licensed physician and employs or contracts with the medical providers. That entity holds the medical license, bills for medical services, owns the medical records, and controls all clinical decisions. Alongside it sits a management services organization, usually an LLC, owned by the chiropractor. The MSO owns or leases the building, the equipment, and the software. It employs the non-clinical staff. It provides billing, scheduling, marketing, human resources, compliance support, and administration to the professional entity under a written management services agreement, and it is paid a fee for doing so.
The fee is the fulcrum. Health care counsel across the field describe the same two requirements: the management fee must be fair market value for the services actually delivered and commercially reasonable in the absence of any referrals, and the MSO’s services must not interfere with the professional entity’s clinical judgment. Regulators and plaintiffs’ counsel examine the level of control the MSO exercises. Where control over medical operations is high enough, the arrangement can be characterized as a sham designed to disguise the practice of medicine by an unlicensed entity.
A management agreement is not a document you sign once. It is a description of work you have to actually perform every month, and be able to prove you performed.
Where These Structures Break
In our experience the paperwork is rarely the problem. Counsel drafts a defensible agreement, everyone signs, and then the operations drift away from the documents within about ninety days. The failure patterns are consistent.
- Commingled money. One bank account, one merchant processor, one payroll run. If medical collections and chiropractic collections land in the same account and staff are paid from whichever entity has cash that week, there is no functional separation to defend.
- A fee that floats with medical revenue. A percentage-of-collections management fee draws attention under both state law and the federal Anti-Kickback Statute at 42 U.S.C. 1320a-7b, and HHS OIG guidance has repeatedly scrutinized arrangements where compensation varies with the volume or value of federal health care program business. A fixed fee supported by a fair market value analysis is a far quieter position.
- Undocumented services. The agreement lists twenty categories of management services. Nobody produces evidence that any of them happened. There should be a monthly file: reports delivered, meetings held, systems maintained, staff supervised.
- The physician who never shows up. A medical director whose only function is a signature is the fastest route to a bad outcome, and it is a pattern regulators recognize immediately.
- Ancillary services layered on without a referral analysis. Physical therapy, imaging, and clinical laboratory services are designated health services under the federal physician self-referral law. If Medicare or Medicaid patients are in the mix, that analysis is not optional.
From the Field
A four-provider integrated practice in the Mountain West had added a nurse practitioner and a part-time MD two years earlier, using an MSO structure drafted by competent counsel. On paper it was clean. In practice, all collections flowed into a single operating account, the entire staff was on one payroll, and the management fee had never been calculated – the chiropractor simply drew what the practice could support. When a payer opened a routine credentialing review, the owner could not produce a coherent answer to who employed whom. Our fractional COO engagement worked through it over four months: opening and reconciling separate accounts, splitting payroll by entity and re-papering the employment agreements, building a fee methodology from a fair market value analysis, and creating a monthly management services file the office manager now assembles in about forty minutes. Counsel reviewed and updated the agreement to match what the practice actually did. The review closed without a finding, and the practice went into its next lender conversation with financials that separated cleanly by entity for the first time.
The Part You Cannot Do From an Article
Everything above is general orientation. Corporate practice rules, professional entity statutes, fee-splitting prohibitions, and scope of practice for chiropractors, NPs, and PAs are all state law, and they change. Two states that look identical in a fifty-state summary chart can produce opposite answers on the specific question of whether your management fee methodology is permissible. Have health care counsel licensed in your state review the structure before you sign a lease, hire a physician, or take on an investor. Treat any consultant who tells you a single template works nationwide as a red flag, not a shortcut.
Advice, Execution, and Who Does the Work
A good consultant can map this for you. They will analyze your state’s rules, model the entity structure, coordinate with counsel, and hand you a clear implementation plan with a task list and a sequence. If you have an office manager or administrator with the bandwidth and the financial literacy to run that list, consulting is the right call and often the more economical one. We will tell you that on the call if it is what we see.
The reason integration structures drift is not that the plan was wrong. It is that implementing it means opening bank accounts, re-papering employment agreements, splitting a payroll, rebuilding a chart of accounts by entity, changing how the front desk checks in a medical patient versus a chiropractic patient, and assembling a management services file every month for the rest of the practice’s life. That is dozens of small operational tasks landing on people who already have full days. A fractional executive does the same analysis and then sits in the practice doing that work with your staff until it is running without them.
One caution as you shop. “Fractional executive” is an unregulated label, and some firms sell ordinary consulting under it. The test is not the title on the proposal; it is whether the person will be working inside your systems with your staff, or delivering a plan for you to deploy. Both are legitimate services. Know which one you are buying before you sign, and buy the one that matches the hours your team actually has.
Sources
- Chiropractic Economics, 28th Annual Salary and Expense Survey (2025) — https://www.chiroeco.com/ce-annual-salary-and-expense-survey/
- Medical Board of California, Corporate Practice of Medicine — https://www.mbc.ca.gov/Licensees/Corporate_Practice.aspx
- California Business and Professions Code, Division 2, Chapter 5, Article 18 (Section 2400 et seq.) — https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=2.&title=&part=&chapter=5.&article=18.
- Wachler and Associates, Updates to Michigan’s Business Entities Laws Allow Chiropractors to Engage in Multidisciplinary Practices with Physicians — https://www.wachler.com/articles/2023-articles-by-wachler-associates-pc/recent-updates-to-michigans-business-entities-laws-allow-chiropr/
- Kansas State Board of Healing Arts, General Counsel FAQs: Corporations — https://www.ksbha.ks.gov/departments/general-counsel/general-counsel-faqs/corporations
- 42 U.S.C. 1320a-7b, Criminal penalties for acts involving Federal health care programs (Anti-Kickback Statute) — https://www.law.cornell.edu/uscode/text/42/1320a-7b
More in the Integrated Chiropractic Series
- Adding a Medical Provider: The Break-Even Math Nobody Runs First — the break-even, compensation, and ramp model to build before you sign a medical provider.
- Credentialing and Billing the Medical Side: Where Integrated Practices Get Burned — enrollment timelines, incident-to, split or shared visits, and the documentation that has to exist behind each.
- Regenerative Medicine: The Compliance Cost of a Cash Service Line — what FDA and FTC enforcement has actually targeted in regenerative medicine, and how to build a program that holds up.
- Staffing a Multidisciplinary Clinic Without Building Two Clinics in One Building — the roles, schedule template, and internal referral workflow that keep an integrated clinic from splitting in two.
See the full Integrated Chiropractic practice management page →