Indiana Healthcare
Compliance Guide

Indiana presents a dynamic, yet generally favorable, regulatory landscape for healthcare companies, including those leveraging telehealth. The state has actively embraced telehealth expansion, particularly following the COVID-19 pandemic, with legislative efforts aimed at solidifying its role in healthcare delivery. Key regulatory bodies include the Indiana Professional Licensing Agency (IPLA), which oversees various professional boards like the Medical Licensing Board of Indiana and the Indiana Board of Pharmacy, and the Indiana Department of Health. Indiana's business climate is generally pro-business, but healthcare operations are subject to specific regulations designed to protect patient safety and ensure ethical practice. Recent legislative actions, such as those impacting telehealth reimbursement parity and the scope of practice for certain providers, underscore the state's commitment to integrating modern healthcare delivery models while maintaining regulatory oversight. Companies looking to operate in Indiana must navigate a nuanced environment concerning corporate practice of medicine, professional licensure, and specific prescribing rules, especially for controlled substances. The state's approach often balances innovation with patient protection, requiring a meticulous compliance strategy. While not as restrictive as some states regarding the Corporate Practice of Medicine, understanding its implications is crucial. Telehealth is broadly supported, but specific requirements for establishing a valid patient-provider relationship and informed consent must be met. Overall, Indiana offers significant opportunities for healthcare innovation, provided companies adhere strictly to its evolving regulatory framework.

Indiana's Corporate Practice of Medicine (CPOM) doctrine is generally considered less restrictive than in many other states, but it is not entirely absent. There is no explicit statute prohibiting the corporate practice of medicine for physicians, unlike some states that have clear statutory prohibitions. Instead, Indiana's CPOM doctrine is primarily derived from common law principles and interpretations of professional licensing statutes that prohibit the unauthorized practice of medicine and uphold the professional independence of licensed practitioners. The fundamental principle is that a business entity, particularly one not owned by licensed professionals, cannot directly employ physicians or other licensed healthcare providers to practice medicine, as this could interfere with the physician's independent medical judgment and potentially lead to fee-splitting or other ethical violations. While a non-physician owned entity cannot directly 'practice medicine,' it can own the assets of a medical practice (e.g., equipment, real estate) and provide administrative and management services to a professional medical practice. This typically leads to the adoption of a 'Management Services Organization' (MSO) model, where the MSO (non-physician owned) contracts with a Professional Corporation (PC) or Professional Limited Liability Company (PLLC) owned by licensed physicians or other authorized professionals. The PC/PLLC employs the licensed providers and delivers clinical services, while the MSO handles non-clinical aspects like billing, scheduling, and facility management. This structure is generally permitted in Indiana, provided the MSO does not exert control over clinical decision-making. Non-physicians can own healthcare businesses that do not directly engage in the practice of medicine. For example, a non-physician can own a medical device company, a laboratory, or a management services organization. However, if the entity provides services that constitute the practice of medicine, it must be owned by licensed professionals. For telehealth companies, medspas, dental practices, and wellness clinics, this means that the clinical services component must be controlled by licensed professionals. Medspas, for instance, often involve medical procedures (e.g., injectables, laser treatments) that constitute the practice of medicine. Therefore, the medical director or supervising physician must maintain ultimate clinical authority, and the entity providing these services should ideally be structured as a professional entity. Similarly, dental practices must be owned by licensed dentists, and wellness clinics offering medical services must comply with these professional ownership requirements. The key restriction is preventing lay interference with professional judgment and ensuring that patient care decisions are made solely by qualified, licensed professionals. Indiana Code Title 25, Article 22.5, which governs physicians, and Title 25, Article 14, governing dentists, implicitly support this by defining who can practice these professions.

Indiana has a robust framework supporting telehealth, largely codified in Indiana Code (IC) 25-1-9.5, which defines telehealth and outlines requirements for its practice. A valid patient-provider relationship can be established via telehealth without a prior in-person examination, provided the practitioner complies with the standard of care. IC 25-1-9.5-4 explicitly states that a health care provider may establish a patient-provider relationship through a telehealth interaction. This relationship must be established in a manner consistent with the standard of care that would apply to an in-person encounter. All modalities are permitted, including live interactive audio-visual, audio-only, and asynchronous (store-and-forward), so long as they meet the standard of care and allow for an appropriate evaluation. IC 25-1-9.5-3 defines 'telehealth' broadly to include the use of electronic communications, information technology, or other means to provide health care services to a patient who is at a different site than the health care provider. There are no specific telehealth registration requirements for providers beyond their standard professional licensure in Indiana. Providers must be licensed in Indiana to provide telehealth services to patients located in Indiana. Informed consent is a critical component. IC 25-1-9.5-5 requires that a healthcare provider obtain informed consent from a patient, or the patient's representative, before providing telehealth services. This consent must include information about the services, potential risks, and the patient's right to withdraw consent. While the statute does not specify the exact format, it generally implies a clear understanding by the patient of the nature of telehealth. There are no explicit geographic restrictions within Indiana for telehealth services, meaning a licensed Indiana provider can treat a patient anywhere within the state. However, providers must ensure their technology is secure and compliant with HIPAA. Reimbursement parity for telehealth services is also largely in place, requiring insurers to cover telehealth services at the same rate as in-person services, as per IC 27-8-14.7, further supporting its widespread adoption.

Indiana's prescribing rules for controlled substances via telehealth are generally aligned with federal Drug Enforcement Administration (DEA) requirements, but with specific state nuances. Effective May 11, 2023, the federal Ryan Haight Online Pharmacy Consumer Protection Act of 2008 generally requires an in-person medical evaluation before prescribing controlled substances. However, the DEA has extended exceptions for telehealth prescribing of controlled substances established during the COVID-19 Public Health Emergency (PHE) until the earlier of November 11, 2023, or November 11, 2024, if the practitioner-patient relationship was established on or before November 11, 2023. For relationships established after that date, an in-person exam is generally required for Schedule II-V controlled substances. Indiana Code (IC) 25-1-9.5-6 specifically addresses prescribing via telehealth. It states that a practitioner may prescribe a drug, including a controlled substance, through a telehealth interaction if the practitioner has established a valid patient-practitioner relationship and has conducted an appropriate examination. For controlled substances, the practitioner must also comply with all state and federal laws, including those related to the Prescription Drug Monitoring Program (PDMP). All schedules (II-V) can potentially be prescribed via telehealth if the federal and state requirements, including the in-person exam where applicable, are met. The Indiana PDMP, known as INSPECT (Indiana Scheduled Prescription Electronic Collection and Tracking), is mandatory. IC 35-48-7-10.1 requires practitioners to review a patient's INSPECT history before prescribing an opioid or benzodiazepine, and for subsequent prescriptions within a certain timeframe. This applies equally to telehealth encounters. There are no specific quantity or refill limitations unique to telehealth beyond those applicable to in-person prescribing under Indiana law (e.g., limits on initial opioid prescriptions for acute pain, IC 16-42-22-2.5). Special rules apply to specific drug classes. For example, for GLP-1s (which are not controlled substances), testosterone (a Schedule III controlled substance), and stimulants (Schedule II), the general rules apply. The critical factor remains the establishment of a legitimate medical purpose and a valid patient-practitioner relationship, with due diligence regarding patient assessment and monitoring, consistent with the standard of care and federal/state controlled substance regulations. Practitioners must be mindful of the evolving federal landscape regarding the Ryan Haight Act and its exceptions.

Indiana's scope of practice for Advanced Practice Registered Nurses (APRNs), including Nurse Practitioners (NPs), and Physician Assistants (PAs) is defined by statute and administrative rules, reflecting a trend towards greater autonomy for these providers, though not full practice authority for all. Nurse Practitioners (NPs) in Indiana operate under a collaborative practice agreement with a physician, as outlined in IC 25-23-1-19.5. While they can diagnose, treat, and prescribe medications, including controlled substances, this must occur within the scope of their collaborating physician's practice and specialty. The collaborative agreement outlines the scope of the NP's practice, the methods of collaboration, and protocols for consultation and referral. Recent legislative efforts have aimed to reduce the stringency of these agreements, but full independent practice authority has not yet been granted. Physician Assistants (PAs) in Indiana also practice under the supervision of a physician, as per IC 25-27.5. PAs can perform medical services delegated by their supervising physician, which may include diagnosing, treating, and prescribing, including controlled substances. The supervising physician is responsible for the PA's actions, and the PA's scope of practice is defined by the supervising physician's practice and the PA's education, training, and experience. There is no specific statutory requirement for a formal 'collaborative agreement' for PAs in the same way as NPs, but supervision is mandatory. Delegation rules for Medical Assistants (MAs) in Medspas are particularly important. In Indiana, MAs are generally permitted to perform delegated tasks that fall within their training and are supervised by a physician or other licensed practitioner. However, tasks that constitute the practice of medicine, such as performing injections (e.g., Botox, fillers) or operating lasers, cannot be delegated to an MA. These procedures must be performed by a licensed physician, NP, or PA, or by a registered nurse (RN) under direct supervision and specific protocols. IC 25-22.5-1-1.1 defines the practice of medicine, and non-licensed personnel cannot perform acts falling under this definition. Supervision requirements vary by profession and task. For NPs, the collaborative agreement outlines supervision. For PAs, the supervising physician must be readily available for consultation. For RNs and LPNs, delegation and supervision are governed by the Indiana State Board of Nursing (IC 25-23). Any healthcare company, especially medspas or wellness clinics, must meticulously adhere to these delegation and supervision rules to avoid unauthorized practice of medicine charges.

Navigating Indiana's business structuring requirements, particularly concerning the Corporate Practice of Medicine (CPOM), is critical for healthcare companies. The PC-MSO (Professional Corporation - Management Services Organization) structure is the predominant model used to ensure compliance with Indiana's CPOM principles. A Professional Corporation (PC) or Professional Limited Liability Company (PLLC) owned by licensed healthcare professionals (e.g., physicians, dentists) directly employs the practitioners and delivers the clinical services. This entity maintains full clinical autonomy and decision-making authority. Concurrently, a separate Management Services Organization (MSO), which can be owned by non-licensed individuals or entities, enters into a Management Services Agreement (MSA) with the PC/PLLC. The MSO provides all non-clinical administrative, management, and business support services, such as billing, scheduling, marketing, facility management, and IT support. This structure is needed when the clinical services constitute the 'practice of medicine' (or dentistry, etc.) and the investors or owners are not all licensed professionals. Fee-splitting rules are a significant consideration. Indiana Code 25-22.5-1-2(a)(10) prohibits physicians from dividing fees for professional services with another person who is not a partner, employee, or shareholder in a professional corporation with the physician, unless the division is for services rendered by the other person. This means that an MSO cannot receive a percentage of professional fees directly for patient care services. Instead, the MSA must stipulate a fair market value (FMV) fee for the management services provided by the MSO, typically a fixed fee or a percentage of the PC's gross collections, provided it is not tied to referrals and reflects the actual value of the services rendered. The FMV compensation structure is crucial to avoid illegal fee-splitting and kickback allegations. Management Services Agreement (MSA) requirements are paramount. The MSA must clearly delineate the services provided by the MSO, the compensation structure (FMV), and explicitly state that the MSO has no control over clinical decisions. It should also address compliance with HIPAA, Stark Law, and Anti-Kickback Statute, if applicable. Professional corporation requirements under Indiana Code Title 23, Article 1.5, dictate that PCs must be formed for the sole purpose of rendering professional services and that all shareholders must be licensed in the profession for which the PC is organized. This ensures that clinical control remains with licensed professionals. To structure ownership for compliance, non-licensed investors or entities should invest in or own the MSO, while licensed professionals own the PC/PLLC. This clear separation of clinical and administrative functions, with appropriate contractual agreements, is the cornerstone of compliant healthcare business operations in Indiana.

Indiana's regulatory landscape for healthcare continues to evolve, with several key developments and ongoing legislative discussions impacting telehealth, CPOM, and prescribing. As of late 2024 and looking into 2025-2026, several areas warrant attention. Telehealth Parity and Scope: While Indiana has established reimbursement parity for telehealth, there are ongoing discussions regarding the permanence of certain flexibilities enacted during the COVID-19 Public Health Emergency (PHE). Legislative proposals may seek to clarify or expand the types of services eligible for telehealth reimbursement and potentially streamline the process for out-of-state providers to offer telehealth services to Indiana residents, though full interstate licensure compact participation for all professions is still developing. Controlled Substance Prescribing via Telehealth: The federal landscape regarding the Ryan Haight Act and its exceptions for telehealth prescribing of controlled substances remains a critical area. The DEA's extensions of PHE flexibilities are temporary, and new permanent rules are anticipated. Indiana will likely align its state-specific regulations with the final federal rules, potentially requiring an in-person visit for initial controlled substance prescriptions for new patients. Healthcare companies must monitor DEA and Indiana Board of Pharmacy guidance closely. Scope of Practice for APRNs: There have been recurring legislative efforts to grant greater autonomy to Advanced Practice Registered Nurses (APRNs), including Nurse Practitioners, by reducing or eliminating the requirement for a collaborative practice agreement with a physician. While full practice authority has not yet passed, these discussions are expected to continue, potentially leading to changes that would expand the independent practice capabilities of NPs in Indiana. Interstate Licensure Compacts: Indiana is a member of several interstate licensure compacts, including the Interstate Medical Licensure Compact (IMLC) for physicians and the Nurse Licensure Compact (NLC) for registered nurses and licensed practical nurses. Participation in these compacts facilitates multi-state practice, including telehealth. There are ongoing efforts to expand compact participation to other professions, such as physical therapists and psychologists, which would further streamline multi-state telehealth operations. Enforcement Trends: The Medical Licensing Board of Indiana and the Indiana Board of Pharmacy continue to actively enforce professional standards. Recent enforcement cases have focused on inappropriate prescribing practices, particularly for controlled substances, and violations of the standard of care in telehealth encounters. Companies should be aware that regulatory bodies are scrutinizing telehealth practices with the same rigor as in-person care. Monitoring legislative bill trackers for the Indiana General Assembly and official publications from the Indiana Professional Licensing Agency will be crucial for staying abreast of these changes.

For healthcare companies entering or expanding in Indiana, a meticulous, multi-faceted compliance strategy is essential. Here's actionable guidance: 1. Licensure First: Ensure all providers (physicians, NPs, PAs, etc.) are properly licensed by the Indiana Professional Licensing Agency (IPLA) before providing any services to Indiana residents. For telehealth, providers must hold an Indiana license, even if licensed in another state, unless operating under a specific compact (e.g., IMLC, NLC). 2. CPOM Compliance: If your business involves non-licensed owners or investors and delivers clinical services, immediately establish a PC-MSO structure. Draft robust Management Services Agreements (MSAs) that clearly define the MSO's administrative role, ensure fair market value (FMV) compensation, and explicitly state the PC's clinical autonomy. Avoid any direct fee-splitting arrangements. 3. Telehealth Protocol Development: Implement comprehensive telehealth protocols covering patient intake, informed consent (electronic consent is generally acceptable if verifiable), appropriate technology use (HIPAA-compliant platforms), and emergency procedures. Ensure your providers understand how to establish a valid patient-provider relationship via telehealth per IC 25-1-9.5. 4. Controlled Substance Prescribing Review: Develop strict internal policies for controlled substance prescribing via telehealth, aligning with both federal DEA rules (including Ryan Haight Act requirements and any current exceptions) and Indiana state law. Mandate INSPECT (PDMP) checks for all opioid and benzodiazepine prescriptions. 5. Scope of Practice Adherence: For NPs and PAs, ensure all collaborative practice agreements (for NPs) or supervision agreements (for PAs) are current, compliant with Indiana statutes (IC 25-23-1-19.5 for NPs, IC 25-27.5 for PAs), and filed where required. For medspas, strictly limit delegated tasks to non-medical procedures for MAs and ensure all medical procedures are performed by appropriately licensed and supervised professionals. 6. Data Security and Privacy: Implement robust HIPAA compliance measures, including secure data transmission, storage, and patient consent for telehealth. 7. Continuous Monitoring: Appoint a dedicated compliance officer or team to monitor legislative changes, board rulings, and enforcement actions from the IPLA, Medical Licensing Board, and Board of Pharmacy. Common Pitfalls to Avoid: Operating without proper licensure, failing to establish a compliant PC-MSO structure, improper fee-splitting, inadequate informed consent for telehealth, and non-compliance with controlled substance prescribing rules. Timeline Expectations: Provider licensing can take 2-4 months. Business entity formation (PC/MSO) and drafting compliant agreements typically take 1-3 months. Allow ample time for legal review and internal policy development before launch.