Michigan Healthcare
Compliance Guide

Michigan presents a dynamic yet generally favorable regulatory environment for healthcare companies, balancing patient access with robust oversight. The state has actively embraced telehealth, particularly post-pandemic, codifying many temporary flexibilities into permanent law. This commitment is evident in Public Act 249 of 2020, which significantly expanded telehealth coverage and modalities. Key regulatory bodies include the Michigan Department of Licensing and Regulatory Affairs (LARA), which oversees various health professional boards (e.g., Michigan Board of Medicine, Michigan Board of Osteopathic Medicine and Surgery, Michigan Board of Nursing, Michigan Board of Pharmacy), and the Michigan Department of Health and Human Services (MDHHS). The business climate is moderately complex, primarily due to a nuanced Corporate Practice of Medicine (CPOM) doctrine that, while not as strict as some states, still requires careful structuring. Recent legislative actions have focused on solidifying telehealth parity, addressing behavioral health access, and refining controlled substance prescribing. For instance, amendments to the Public Health Code (MCL 333.16284) have clarified the establishment of a patient-provider relationship via telehealth. Companies entering Michigan must navigate these regulations, ensuring their operational models align with state-specific CPOM interpretations, telehealth practice standards, and professional licensing requirements. The state's emphasis on patient safety and quality of care underpins its regulatory framework, necessitating diligent compliance from all healthcare providers and entities.

Michigan's Corporate Practice of Medicine (CPOM) doctrine is enforced, albeit with a degree of nuance that allows for certain non-physician ownership structures, particularly when structured carefully. The legal basis for Michigan's CPOM stems primarily from statutory provisions within the Michigan Public Health Code, specifically MCL 333.16221, which prohibits the unlicensed practice of a health profession, and MCL 333.17001 et seq. for medicine and MCL 333.17501 et seq. for osteopathic medicine. These statutes imply that only licensed professionals or professional corporations comprised of licensed professionals can practice medicine.

Ownership Structures Permitted:

• Professional Corporations (PCs): Michigan permits the formation of professional corporations (P.C.s) under the Professional Service Corporation Act, MCL 450.1301 et seq. These entities must be owned by licensed professionals. For medical practices, this means ownership by physicians licensed in Michigan.
• Non-Physician Ownership: Direct ownership of a medical practice by non-physicians is generally prohibited. However, Michigan does not have an explicit, broadly worded CPOM statute that strictly forbids all forms of corporate involvement in healthcare. Instead, the prohibition is inferred from licensing statutes. This allows for the use of Management Services Organization (MSO) models, where a non-physician-owned MSO provides administrative, non-clinical services to a physician-owned professional corporation.

Restrictions and Implications:

• Control over Clinical Decisions: The core principle is that non-licensed individuals or entities cannot control, direct, or interfere with a physician's independent medical judgment or clinical decisions. The MSO must not dictate treatment protocols, hiring/firing of clinical staff, or physician compensation based on patient volume or treatment plans.
• Fee-Splitting: Michigan's Public Health Code (MCL 333.16221(1)(d)) prohibits fee-splitting, which is the division of professional fees for patient services with an unlicensed person. This means an MSO cannot receive a percentage of professional fees directly related to patient care. MSO fees must be fair market value for the administrative services provided, not contingent on patient revenue.
• Medspas, Dental Practices, and Wellness Clinics: These entities are subject to similar CPOM considerations. For medspas, medical procedures (e.g., injectables, laser treatments) must be performed by or under the direct supervision of a licensed physician, PA, or NP, and the professional entity must retain clinical control. Dental practices must be owned by licensed dentists (MCL 333.16601 et seq.). Wellness clinics offering medical services must also adhere to these principles, ensuring that any medical advice, diagnosis, or treatment is provided by licensed professionals within a compliant structure.

Impact on Telehealth Companies: Telehealth companies operating in Michigan must ensure their physician networks are structured compliantly. This often involves establishing a Michigan professional corporation owned by licensed Michigan physicians, which then contracts with the telehealth platform (acting as an MSO) for technology, marketing, and administrative support. The MSO cannot employ the physicians directly or exert control over their medical practice. Any arrangement must clearly delineate the clinical responsibilities residing solely with the licensed professionals and their professional entity, while the MSO provides only non-clinical support services at fair market value.

Michigan has a progressive stance on telehealth, largely codified by Public Act 249 of 2020, which amended the Public Health Code to define and regulate telehealth services. This legislation ensures broad coverage for telehealth and establishes clear guidelines for its practice.

Establishment of Patient-Provider Relationship:

• Yes, a patient-provider relationship can be established via telehealth in Michigan. MCL 333.16284 explicitly states that a health professional-patient relationship may be established through telehealth. This relationship requires the health professional to meet the standard of care that would apply if the health professional provided the health care services in person.
• The law mandates that the health professional must have sufficient information to make an informed diagnosis and treatment plan, which may include obtaining a patient's medical history and performing a physical examination. While an in-person exam is not strictly required to establish the relationship, the professional must determine if telehealth is appropriate for the patient's condition.

Permitted Modalities:

• Michigan law permits a wide range of telehealth modalities. MCL 333.16283 defines 'telehealth' as the use of electronic information and telecommunication technologies to support or promote long-distance clinical health care, patient and professional health-related education, public health, or health administration.
• This includes:
  • Live Two-Way Audio-Visual: Real-time interactive communication, which is the preferred and most widely accepted modality for establishing new patient relationships and delivering complex care.
  • Audio-Only Telephone: Permitted, particularly for follow-up care or in situations where video is not feasible, though its use for initial diagnosis may be scrutinized. Public Act 249 specifically includes 'telephonic' as a permissible modality.
  • Asynchronous (Store-and-Forward): Allowed, where medical information (e.g., images, pre-recorded video, data) is transmitted and reviewed later. This is suitable for certain specialties like dermatology or radiology.
  • Remote Patient Monitoring (RPM): Also permitted, involving the collection of personal health and medical data from a patient in one location and electronic transmission of that data to a health care professional in a different location for use in care and treatment.

Telehealth Registration Requirements:

• Michigan does not have a separate 'telehealth registration' for providers already licensed in Michigan. Providers must hold an active, unrestricted license issued by the appropriate Michigan health professional board to practice telehealth within the state.
• Out-of-state providers must be licensed in Michigan to provide telehealth services to Michigan residents, unless an exception applies (e.g., consultation with a Michigan-licensed provider, emergency care). Michigan is a member of the Interstate Medical Licensure Compact (IMLC), facilitating licensure for physicians from participating states.

Informed Consent Requirements:

• Yes, informed consent is required for telehealth services. MCL 333.16284(2) mandates that a health professional providing telehealth services must obtain informed consent from the patient, or the patient's authorized representative, before providing the services. This consent must include, at a minimum, information about the services, the technologies used, and the patient's rights and responsibilities. The consent should also address privacy, security, and the potential for technology failures.

Geographic Restrictions:

• There are generally no geographic restrictions within Michigan for telehealth services, meaning a licensed Michigan provider can serve a patient anywhere in the state. However, the provider must be physically located in Michigan or a compact state (if applicable) at the time of service, or otherwise be licensed in Michigan. The patient must be located in Michigan at the time of service for the Michigan license to apply.

Michigan's prescribing rules for telehealth largely align with in-person prescribing, with specific considerations for controlled substances. The Michigan Board of Pharmacy and the various health professional boards (Medicine, Osteopathic Medicine, Nursing) govern these regulations.

Controlled Substances Prescribed via Telehealth:

• Michigan generally permits the prescribing of controlled substances via telehealth, provided a bona fide patient-provider relationship has been established and an appropriate medical evaluation has been performed. This aligns with federal DEA regulations, which, following the COVID-19 public health emergency, continue to allow for the prescribing of controlled substances via telehealth without an initial in-person visit, under specific conditions.
• Schedules: All schedules (II, III, IV, V) can potentially be prescribed via telehealth, subject to the professional's judgment and adherence to the standard of care. However, prescribers must exercise extreme caution, especially with Schedule II substances, ensuring robust patient evaluation and monitoring.

DEA Requirements:

• Providers prescribing controlled substances via telehealth must hold a valid DEA registration associated with their Michigan practice location. They must also comply with all federal DEA regulations, including record-keeping and security requirements. The DEA's temporary flexibilities allowing for prescribing of controlled substances without an initial in-person exam have been extended. Prescribers should remain vigilant for updates to these federal rules.

PDMP Checking Required:

• Yes, Michigan mandates the use of the Michigan Automated Prescription System (MAPS), the state's Prescription Drug Monitoring Program (PDMP). MCL 333.7333a requires prescribers to review a patient's MAPS history before prescribing or dispensing a controlled substance. This check is required for Schedule 2, 3, 4, and 5 controlled substances each time a new prescription is issued, and at least every 90 days for ongoing treatment. This requirement applies equally to telehealth encounters.

Quantity or Refill Limitations:

• Michigan has specific limitations, particularly for opioids. For acute pain, the initial prescription for an opioid controlled substance for an adult cannot exceed a 7-day supply (MCL 333.7333(2)). For minors, the initial prescription for an opioid cannot exceed a 7-day supply, and the prescriber must obtain written consent from the minor's parent or guardian (MCL 333.7333(3)). These limitations apply regardless of whether the prescription is issued via telehealth or in-person.
• Refills for Schedule II substances are generally prohibited, and new prescriptions are required. Schedule III-V substances may have up to five refills within six months.

Special Rules for Specific Drug Classes:

• GLP-1s (e.g., Ozempic, Wegovy): While not controlled substances, prescribing GLP-1s via telehealth requires a thorough medical evaluation, including patient history, physical examination (which may be conducted remotely if clinically appropriate), and monitoring for side effects. Misuse or off-label prescribing without proper medical justification can lead to disciplinary action.
• Testosterone (Controlled Substance – Schedule III): Prescribing testosterone via telehealth is permitted but subject to the same stringent requirements as other Schedule III controlled substances. This includes establishing a legitimate medical need, comprehensive evaluation (including lab work), and ongoing monitoring.
• Stimulants (e.g., Adderall, Ritalin – Schedule II): Prescribing Schedule II stimulants via telehealth is allowed under the current federal flexibilities, but it is a high-risk area. Prescribers must ensure a comprehensive diagnostic evaluation, including differential diagnoses, and ongoing monitoring. Many boards recommend or require an initial in-person visit or a robust virtual equivalent for ADHD diagnosis and stimulant initiation, though Michigan law does not explicitly mandate an in-person visit for this purpose if the standard of care can be met remotely.

All prescribing, whether in-person or via telehealth, must adhere to the standard of care, be for a legitimate medical purpose, and be within the prescriber's scope of practice.

Michigan defines the scope of practice for various mid-level providers through the Public Health Code and administrative rules, influencing delegation and supervision requirements.

Nurse Practitioners (NPs):

• Michigan does not grant full practice authority to Nurse Practitioners. NPs in Michigan are known as 'Nurse Practitioners' (NPs) or 'Certified Nurse Midwives' (CNMs) and operate under specific protocols.
• Collaborative Practice Agreements: NPs must practice in collaboration with a physician. While the term 'collaborative practice agreement' is often used, Michigan law refers to 'delegation' and 'supervision' by a physician. MCL 333.17210 permits a registered professional nurse who has been granted a specialty certification as a nurse practitioner to perform acts, tasks, or functions that are within the scope of practice of a registered professional nurse and that are delegated by a physician.
• The physician does not need to be physically present but must be available for consultation. The delegation must be appropriate for the NP's education, training, and experience. The physician remains ultimately responsible for the delegated medical acts.

Physician Assistants (PAs):

• PAs in Michigan practice under the supervision of a physician. MCL 333.17048 states that a PA shall provide medical services, including the services described in MCL 333.17046, under the supervision of a licensed physician.
• Supervision Requirements: The supervising physician is responsible for the PA's medical acts. While the physician does not need to be physically present at all times, they must be readily available for consultation and review the PA's charts. The level of supervision required depends on the PA's experience, the complexity of the patient's condition, and the setting.
• PAs can perform a broad range of medical services, including diagnosing, treating, prescribing, and assisting in surgery, as delegated by their supervising physician and within their education and training.

Medical Assistants (MAs) in Medspas:

• Medical Assistants (MAs) in Michigan are generally considered unlicensed assistive personnel. Their scope of practice is limited to administrative and delegated clinical tasks that do not require independent medical judgment.
• Delegation Rules: In medspas, MAs can perform tasks like taking vital signs, preparing patients for procedures, and documenting patient information. However, they cannot perform procedures that constitute the practice of medicine, nursing, or other licensed health professions. This includes, but is not limited to, administering injectables (e.g., Botox, fillers), performing laser treatments, or conducting advanced skin care procedures that involve diagnosis or treatment of medical conditions. These procedures must be performed by or directly supervised by a licensed physician, PA, or NP.
• The supervising licensed professional must ensure the MA is adequately trained and competent for any delegated task and that the task is within the MA's legal scope.

Supervision Requirements (General):

• The supervising professional (physician for NPs and PAs, or physician/NP/PA for MAs) bears ultimate responsibility for the care provided. This includes ensuring appropriate training, competency, and oversight. The level of supervision should be clearly documented in practice protocols or delegation agreements, reflecting the specific services provided and the qualifications of the supervised individual. Any entity employing these providers must ensure these supervisory relationships are legally sound and operationally effective.

Navigating Michigan's Corporate Practice of Medicine (CPOM) doctrine necessitates careful business structuring, often involving a Professional Corporation (PC) and Management Services Organization (MSO) model.

PC-MSO Structures – When are they needed?

• The PC-MSO structure is essential in Michigan when non-physician individuals or entities wish to invest in or manage a healthcare practice that provides medical services. Since only licensed professionals (or professional corporations owned by them) can legally 'practice medicine' (MCL 333.16221, MCL 450.1301 et seq.), the PC-MSO model allows for separation of clinical and administrative functions.
• Professional Corporation (PC): This entity, owned exclusively by licensed Michigan physicians, holds the medical licenses, employs the clinical staff (physicians, PAs, NPs), and delivers all patient care. It is responsible for all clinical decisions and maintains the patient-provider relationship.
• Management Services Organization (MSO): This entity, which can be owned by non-physicians, provides all non-clinical, administrative, and business support services to the PC. These services typically include billing, scheduling, marketing, IT, human resources (for administrative staff), equipment leasing, and office space.

Fee-Splitting Rules:

• Michigan strictly prohibits fee-splitting, as outlined in MCL 333.16221(1)(d), which makes it unlawful for a licensee to 'divide fees for professional services with another person, unless the division is between licensees who are partners, associates, or employees in the same professional practice.' This is a critical consideration for PC-MSO arrangements.
• The MSO's compensation from the PC must be for legitimate, fair market value (FMV) administrative services rendered, not a percentage of professional fees or patient revenue. The MSO's fees should be fixed or based on a cost-plus model, not directly tied to the volume or value of patient referrals or services.

Management Services Agreement (MSA) Requirements:

• A robust and compliant Management Services Agreement (MSA) is the cornerstone of the PC-MSO structure. Key elements of an MSA in Michigan include:
  • Clear Delineation of Services: Explicitly list all administrative services provided by the MSO and confirm that the PC retains sole control over all clinical decisions.
  • Fair Market Value Compensation: The MSO's compensation must be set at FMV for the services provided, independently verifiable, and not contingent on patient referrals or the volume/value of patient care.
  • Term and Termination: Standard contractual provisions for term, renewal, and termination.
  • Compliance with Laws: Mutual covenants to comply with all applicable federal and state healthcare laws, including anti-kickback statutes, Stark Law (if applicable), and CPOM.
  • No Control over Clinical Practice: Explicitly state that the MSO has no authority or influence over the PC's medical judgment, hiring/firing of clinical staff, or patient care decisions.

Professional Corporation Requirements:

• Professional corporations in Michigan are governed by the Professional Service Corporation Act, MCL 450.1301 et seq.
• Ownership: All shareholders must be licensed in the profession for which the PC is organized (e.g., all shareholders of a medical PC must be licensed physicians).
• Name: The corporate name must include 'P.C.' or 'Professional Corporation.'
• Purpose: The PC's sole purpose must be to render the specific professional service.

How to Structure Ownership for Compliance:

• Physician-Owned PC: The clinical entity (PC) must be 100% owned by licensed Michigan physicians.
• MSO Ownership: The MSO can be owned by non-physicians or investors.
• Contractual Relationship: The relationship between the PC and MSO must be strictly contractual, governed by an MSA that ensures the PC maintains clinical independence and that MSO compensation is FMV for administrative services, avoiding any appearance of fee-splitting or illegal remuneration.
• Employment: Physicians and other licensed clinical staff should be employed by the PC, not the MSO. Administrative staff can be employed by the MSO.
• Leases and Licenses: The PC should hold its own professional licenses and, ideally, lease equipment and space from the MSO at FMV.

Michigan's regulatory landscape for healthcare is continually evolving, with several key developments and ongoing legislative activities impacting telehealth, CPOM, and professional practice.

Telehealth Legislation (2024-2026 Outlook):

• While Public Act 249 of 2020 significantly codified telehealth, ongoing discussions in the Michigan Legislature often revolve around refining payment parity, expanding eligible services, and ensuring equitable access. Expect continued legislative interest in behavioral health telehealth, particularly as federal temporary flexibilities may sunset or be made permanent. Bills may emerge to clarify specific modalities or address cross-state licensure challenges beyond compacts.
• Payment Parity: While Michigan has strong payment parity laws for telehealth, ongoing legislative efforts often seek to reinforce or expand these, particularly for private payers, to ensure telehealth services are reimbursed at rates comparable to in-person services (MCL 500.3406o).

Corporate Practice of Medicine (CPOM) Enforcement:

• Michigan's health professional boards, particularly the Board of Medicine, remain vigilant regarding CPOM compliance. While there haven't been recent high-profile enforcement cases explicitly targeting MSO models, the boards consistently review complaints related to unlicensed practice, fee-splitting, and undue corporate influence over clinical decisions. Companies should anticipate continued scrutiny of arrangements that blur the lines between administrative support and clinical control. Any structure perceived to compromise physician independence or patient safety could draw board attention.

Controlled Substance Prescribing Updates:

• The Michigan Automated Prescription System (MAPS) continues to be a focus for opioid stewardship. Expect ongoing efforts to enhance MAPS functionality and integration. While federal DEA rules for telehealth prescribing of controlled substances remain in flux post-PHE, Michigan prescribers must stay abreast of both federal and state requirements. There may be legislative proposals to further refine opioid prescribing limits or expand access to medication-assisted treatment (MAT) via telehealth.

Compact Participation Updates:

• Interstate Medical Licensure Compact (IMLC): Michigan is an active member of the IMLC, which facilitates expedited licensure for physicians in participating states. This is a significant advantage for telehealth companies seeking to expand physician networks.
• Nurse Licensure Compact (NLC): Michigan is currently not a member of the NLC. There have been legislative efforts to join the NLC in the past, and this remains a potential future development that would significantly impact NP and RN telehealth practice across state lines. Companies should monitor the status of NLC legislation in Michigan.
• Physical Therapy Compact (PTC) and Psychology Interjurisdictional Compact (PSYPACT): Michigan is a member of the PTC and PSYPACT, facilitating interstate practice for these professions.

Board Actions and Enforcement:

• The Michigan Department of Licensing and Regulatory Affairs (LARA) regularly publishes disciplinary actions against licensees. These actions often involve violations of the Public Health Code, including issues related to standard of care, unprofessional conduct, and controlled substance prescribing. Reviewing these actions provides insight into current enforcement priorities and common pitfalls for providers in the state.

Entering the Michigan healthcare market requires a methodical approach to ensure compliance with its specific regulatory framework.

Step-by-Step Compliance Checklist:

1. Entity Formation & CPOM Review:
   • Establish a Michigan Professional Corporation (PC) for clinical services, ensuring 100% physician ownership.
   • Form a separate Management Services Organization (MSO) for administrative functions.
   • Draft a robust Management Services Agreement (MSA) between the PC and MSO, ensuring fair market value compensation and clear separation of clinical and administrative control.
2. Licensure:
   • Ensure all healthcare professionals (physicians, NPs, PAs, etc.) are individually licensed by their respective Michigan health professional boards (e.g., Michigan Board of Medicine, Michigan Board of Nursing).
   • For physicians, leverage the Interstate Medical Licensure Compact (IMLC) if applicable for expedited licensure.
   • Verify DEA registration for all controlled substance prescribers, linked to a Michigan practice address.
3. Telehealth Protocols:
   • Develop clear policies and procedures for establishing patient-provider relationships via telehealth, including informed consent (MCL 333.16284).
   • Ensure technology platforms meet HIPAA security standards and support permitted modalities (live video, audio, asynchronous).
   • Implement protocols for determining when an in-person visit is clinically necessary.
4. Prescribing Compliance:
   • Integrate Michigan Automated Prescription System (MAPS) checks into workflows for all controlled substance prescribing (MCL 333.7333a).
   • Train prescribers on Michigan's opioid prescribing limits (e.g., 7-day initial supply for acute pain, MCL 333.7333).
   • Ensure all prescribing adheres to the standard of care, regardless of modality.
5. Scope of Practice & Supervision:
   • Establish formal delegation and supervision agreements for NPs and PAs with their collaborating/supervising physicians, as required by MCL 333.17210 and MCL 333.17048.
   • Clearly define the scope of practice for all clinical staff, especially in medspas, ensuring unlicensed personnel do not perform licensed medical acts.
6. Privacy & Security:
   • Implement comprehensive HIPAA compliance programs, including Business Associate Agreements (BAAs) with all third-party vendors.
   • Ensure data security measures protect patient health information transmitted via telehealth.

Common Pitfalls to Avoid:

• Ignoring CPOM: Assuming Michigan is a 'friendly' CPOM state and failing to properly structure the PC-MSO relationship, leading to illegal corporate practice or fee-splitting.
• Inadequate Licensure: Providing services to Michigan residents without proper Michigan licensure for all clinicians.
• Insufficient Patient Evaluation: Prescribing controlled substances or complex medications via telehealth without a thorough patient history, appropriate diagnostic workup, or follow-up plan.
• Lack of Informed Consent: Failing to obtain explicit, documented informed consent for telehealth services.
• Non-Compliance with MAPS: Neglecting to check the PDMP before prescribing controlled substances.

Timeline Expectations:

• Entity Formation (PC/MSO): 2-4 weeks.
• Professional Licensure:
  • Standard Michigan License: 2-6 months (varies by board and completeness of application).
  • IMLC Expedited License: 2-4 weeks (after initial IMLC application approval).
• DEA Registration: 2-4 weeks (after state licensure).
• Policy & Procedure Development: Ongoing, but initial drafts 1-2 months.
• Overall Setup: Expect 3-9 months for full operational readiness, depending on the complexity of the service and number of providers.