What's happening
This bill allows various licensed health professionals in New York to jointly form multidisciplinary practices, such as LLCs, corporations, or partnerships.
Why it matters
Expands collaborative care options. By allowing different types of licensed health professionals (e.g., doctors, nurses, pharmacists, therapists, social workers) to jointly own and operate a single business entity, the bill encourages integrated, team-based care models, which could improve patient outcomes and streamline service delivery.
Sets clear boundaries for practice and authority. The bill explicitly prohibits any member of these multidisciplinary businesses from interfering with another member’s clinical judgment or pushing a colleague to act outside their legal scope of practice. This aims to maintain professional autonomy and patient safety even within integrated teams.
Modernizes fee sharing and partnership rules. The legislation updates New York’s anti-fee-splitting laws to permit the pooling and sharing of revenues among licensed professionals in these new multidisciplinary entities, provided they follow legal and ethical guidelines. This removes longstanding legal barriers to joint business ventures among health professionals.
Exempts these practices from hospital-level regulation. The bill clarifies that multidisciplinary practices formed under its provisions are not subject to the same regulatory requirements as hospitals, potentially reducing administrative burdens and enabling more flexible, community-based practice settings.
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Who cares
Headline styles
Let Health Pros Form LLCs
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Let Health Pros Form LLCs
In Assembly Committee · Higher Education · Sponsor Crystal Peoples-Stokes
Full text
12 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4125
2017-2018 Regular Sessions
IN SENATE
February 3, 2017
Introduced by Sens. LAVALLE, BOYLE -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the limited liability company law, the business corporation law, the partnership law, the education law and the public health law, in relation to authorizing certain licensed health services professionals to form limited liability companies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 1203 of the limited liability company law, as amended by chapter 475 of the laws of 2014, is amended to read as follows:
(a) Notwithstanding the education law or any other provision of law, one or more professionals each of whom is authorized by law to render a professional service within the state, or one or more professionals, at least one of whom is authorized by law to render a professional service within the state, may form, or cause to be formed, a professional service limited liability company for pecuniary profit under this article for the purpose of rendering the professional service or services as such professionals are authorized to practice. With respect to a professional service limited liability company formed to provide medical services as such services are defined in article 131 of the education law, each member of such limited liability company must be licensed pursuant to article 131 of the education law to practice medicine in this state. Notwithstanding any other provision of this section, any person licensed pursuant to article 131 of the education law to practice medicine and any person licensed pursuant to articles 132, 137, 140, 141, 143, 144, 153, 154, 155 or 156 or subdivision 3 of section 6902 of article 139 of the education law may form, or cause to be formed, a professional service limited liability company to provide multidisciplinary services with one or more licensed professionals, subject to the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06073-01-7
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following conditions: (i) each member of such limited liability company must be licensed pursuant to title eight of the education law to practice his or her profession in this state; (ii) each member shall only practice his or her profession as specified in his or her respective professional enabling statue under title eight of the education law; and (iii) any clinical integration of professional practices under this section shall not alter, expand or curtail the scope of practice of any of the members; provided further that: (A) no member shall, directly or indirectly, interfere with the clinical judgment or legitimate clinical practice of another member; and (B) no member shall order or direct another member to practice beyond the scope of his or her license. With respect to a professional service limited liability company formed to provide dental services as such services are defined in article 133 of the education law, each member of such limited liability company must be licensed pursuant to article 133 of the education law to practice dentistry in this state. With respect to a professional service limited liability company formed to provide veterinary services as such services are defined in article 135 of the education law, each member of such limited liability company must be licensed pursuant to article 135 of the education law to practice veterinary medicine in this state. With respect to a professional service limited liability company formed to provide professional engineering, land surveying, architectural, landscape architectural and/or geological services as such services are defined in article 145, article 147 and article 148 of the education law, each member of such limited liability company must be licensed pursuant to article 145, article 147 and/or article 148 of the education law to practice one or more of such professions in this state. [With respect to a professional service limited liability company formed to provide licensed clinical social work services as such services are defined in article 154 of the education law, each member of such limited liability company shall be licensed pursuant to article 154 of the education law to practice licensed clinical social work in this state.] With respect to a professional service limited liability company formed to provide creative arts therapy services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice creative arts therapy in this state. With respect to a professional service limited liability company formed to provide marriage and family therapy services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice marriage and family therapy in this state. With respect to a professional service limited liability company formed to provide mental health counseling services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice mental health counseling in this state. With respect to a professional service limited liability company formed to provide psychoanalysis services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice psychoanalysis in this state. With respect to a professional service limited liability company formed to provide applied behavior analysis services as such services are defined in article 167 of the education law, each member of such limited liability company must be licensed or certified pursuant to article 167 of the education law to practice applied behavior analysis
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in this state. In addition to engaging in such profession or professions, a professional service limited liability company may engage in any other business or activities as to which a limited liability company may be formed under section two hundred one of this chapter. Notwithstanding any other provision of this section, a professional service limited liability company (i) authorized to practice law may only engage in another profession or business or activities or (ii) which is engaged in a profession or other business or activities other than law may only engage in the practice of law, to the extent not prohibited by any other law of this state or any rule adopted by the appropriate appellate division of the supreme court or the court of appeals.
§ 2. Subdivision (b) of section 1207 of the limited liability company law, as amended by chapter 475 of the laws of 2014, is amended to read as follows:
(b) With respect to a professional service limited liability company formed to provide medical services as such services are defined in article 131 of the education law, each member of such limited liability company must be licensed pursuant to article 131 of the education law to practice medicine in this state. Notwithstanding any other provision of this section, any person licensed pursuant to article 131 of the education law to practice medicine and any person licensed pursuant to articles 132, 137, 140, 141, 143, 144, 153, 154, 155 or 156 or subdivision 3 of section 6902 of article 139 of the education law may form, or cause to be formed, a professional service limited liability company to provide multidisciplinary services with one or more licensed professionals, subject to the following conditions: (i) each member of such limited liability company must be licensed pursuant to title eight of the education law to practice his or her profession in this state; (ii) each member shall only practice his or her profession as specified in his or her respective professional enabling statute under title eight or the education law; and (iii) any clinical integration of professional practices under this section shall not alter, expand or curtail the scope of practice of any of the members; provided further that: (A) no member shall, directly or indirectly, interfere with the clinical judgement or legitimate clinical practice of another member; and (B) no member shall order or direct another member to practice beyond the scope of his or her license. With respect to a professional service limited liability company formed to provide dental services as such services are defined in article 133 of the education law, each member of such limited liability company must be licensed pursuant to article 133 of the education law to practice dentistry in this state. With respect to a professional service limited liability company formed to provide veterinary services as such services are defined in article 135 of the education law, each member of such limited liability company must be licensed pursuant to article 135 of the education law to practice veterinary medicine in this state. With respect to a professional service limited liability company formed to provide professional engineering, land surveying, architectural, landscape architectural and/or geological services as such services are defined in article 145, article 147 and article 148 of the education law, each member of such limited liability company must be licensed pursuant to article 145, article 147 and/or article 148 of the education law to practice one or more of such professions in this state. [With respect to a professional service limited liability company formed to provide licensed clinical social work services as such services are defined in article 154 of the educa-
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tion law, each member of such limited liability company shall be licensed pursuant to article 154 of the education law to practice licensed clinical social work in this state.] With respect to a professional service limited liability company formed to provide creative arts therapy services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice creative arts therapy in this state. With respect to a professional service limited liability company formed to provide marriage and family therapy services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice marriage and family therapy in this state. With respect to a professional service limited liability company formed to provide mental health counseling services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice mental health counseling in this state. With respect to a professional service limited liability company formed to provide psychoanalysis services as such services are defined in article 163 of the education law, each member of such limited liability company must be licensed pursuant to article 163 of the education law to practice psychoanalysis in this state. With respect to a professional service limited liability company formed to provide applied behavior analysis services as such services are defined in article 167 of the education law, each member of such limited liability company must be licensed or certified pursuant to article 167 of the education law to practice applied behavior analysis in this state.
§ 3. Subdivision (a) of section 1301 of the limited liability company law, as amended by chapter 475 of the laws of 2014, is amended to read as follows:
(a) "Foreign professional service limited liability company" means a professional service limited liability company, whether or not denominated as such, organized under the laws of a jurisdiction other than this state, (i) each of whose members and managers, if any, is a professional authorized by law to render a professional service within this state and who is or has been engaged in the practice of such profession in such professional service limited liability company or a predecessor entity, or will engage in the practice of such profession in the professional service limited liability company within thirty days of the date such professional becomes a member, or each of whose members and managers, if any, is a professional at least one of such members is authorized by law to render a professional service within this state and who is or has been engaged in the practice of such profession in such professional service limited liability company or a predecessor entity, or will engage in the practice of such profession in the professional service limited liability company within thirty days of the date such professional becomes a member, or (ii) authorized by, or holding a license, certificate, registration or permit issued by the licensing authority pursuant to, the education law to render a professional service within this state; except that all members and managers, if any, of a foreign professional service limited liability company that provides health services in this state shall be licensed in this state. With respect to a foreign professional service limited liability company which provides veterinary services as such services are defined in article 135 of the education law, each member of such foreign professional service limited liability company shall be licensed pursuant to article
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Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the limited liability company law, the business corporation law, the partnership law, the education law and the public health law, in relation to authorizing certain licensed health services professionals to form limited liability companies
Purpose
To allow various licensed allied professionals to form multidisciplinary partnerships limited liability companies and professional service corporation.
Summary of provisions
Section 1-3 would amend section of the limited liability company law to allow the following licensed professionals to form multidisciplinary professional; service limited liability companies: physicians, chiropractors, pharmacists, midwives, podiatrist, optometrist, ophthalmic dispensers, psychologists, social workers, massage therapists, occupational therapist and nurse practitioners.
Section 4 would amend the business corporation law to allow the aforementioned licensed health professionals to form professional service corporations.
Sections 5 and 6 would amend the partnership law to allow licensed health professionals to form limited liability partnerships.
Sections 7-9 would amend the limited liability company law to allow licensed health professionals to form professional service limited liability companies.
Section 10 would amend the business corporation law to allow licensed health professionals to form professional service corporations.
Sections 11 and 12 would amend the partnership law to allow licensed health professionals to form limited liability partnerships.
Section 13 would amend the section 6509-a of the education law to allow for the pooling of fees or monies by multidisciplinary services practice form under the partnership, business corporation or LLC laws.
Section 14 would amend section 6530 of the education law to allow licensed health professionals to share fees with a physician for professionals services rendered as part of a multidisciplinary services practice.
Section 15 would amend section 6531 of the education law to allow for the pooling of fees or monies by multidisciplinary services practice formed under the partnership, business corporation or LLC laws.
Section 16 would amend section 2801 of the public health law to ensure that a multidisciplinary services practice does not fall under the definition of hospital.
Justification
The healthcare field is changing rapidly. Collaboration and the ability to offer multidisciplinary services are the present and future. The advent of patient-centered medical homes, health homes and accountable care organizations all promise to shift health care delivery to more collaborative models. As such, New York State's prohibitions on the formation of limited liability companies, partnerships and professional service corporations by allied health professionals are outdated.
This bill seeks to further bring collaboration among licensed health professionals into the 21st century by allowing various professionals to integrate their services under one roof as a partnership LLC or professional service corporation. In permitting such organizational entities to be formed by licensed professionals, it broadens the array of collaborative option available to health care practitioners looking to offer multidisciplinary services. The bill does not change the existing rules surrounding the organizational structures addressed through the legislation. It recognizes that the allied health professions should be treated equally, rather disparately through a piecemeal approach to allowing for a broader array of organizational formation.
Finally, the bill would prohibit the alteration, expansion or curtailing of the scope of practice of any licensed professional providing services through one of the newly formed organizations and provide that no member or partner shall interfere with the clinical judgment or practice of another member. These protections are critical to guarding against the exercise of undue influence over another licensed professional.
Legislative history
2015-16 S.5862/A.8153A.
Fiscal implications
None to the State.
Effective date
30 days after becoming law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.