Tennessee Healthcare
Compliance Guide

Tennessee presents a dynamic, yet generally favorable, regulatory landscape for healthcare companies, including those leveraging telehealth. The state has actively embraced telehealth expansion, particularly post-COVID-19, with legislative efforts aimed at solidifying its role in healthcare delivery. Key regulatory bodies include the Tennessee Board of Medical Examiners (TBME), the Tennessee Board of Nursing (TBN), and the Tennessee Board of Pharmacy (TBP), which collectively oversee licensure, scope of practice, and prescribing. The business climate is generally pro-business, but healthcare operations must navigate specific state laws, particularly regarding corporate practice of medicine (CPOM) and professional licensure. Recent legislative actions, such as the codification of telehealth practice standards and interstate compact participation, signal a commitment to modernizing healthcare delivery while maintaining patient safety. Companies looking to operate in Tennessee should be prepared for a regulatory environment that balances innovation with traditional oversight, requiring meticulous attention to licensure, provider-patient relationship establishment, and prescribing protocols. The state has shown a willingness to adapt its laws to facilitate telehealth, making it an attractive market for virtual care providers, provided they adhere to the nuanced state-specific requirements. Understanding the interplay between professional boards and legislative mandates is crucial for successful entry and sustained compliance.

Tennessee maintains a nuanced, yet generally enforced, Corporate Practice of Medicine (CPOM) doctrine, primarily rooted in statutory provisions and administrative interpretations rather than extensive case law. The legal basis for CPOM in Tennessee is found in the professional licensing statutes, which generally prohibit unlicensed individuals or entities from practicing medicine or employing licensed professionals to do so. For instance, Tenn. Code Ann. § 63-6-204 states that no person shall practice medicine without a license. This is interpreted to mean that only licensed physicians or professional entities owned by physicians can 'practice medicine' or control the clinical decision-making of physicians. Consequently, non-physician-owned entities are generally prohibited from directly employing physicians or controlling their professional judgment. This prohibition extends to other licensed professions, such as dentistry (Tenn. Code Ann. § 63-5-101 et seq.) and optometry (Tenn. Code Ann. § 63-8-101 et seq.).

Ownership Structures:

• Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs): Physicians and other licensed professionals (e.g., dentists, optometrists) are generally required to practice through professional entities, which must be owned by licensed professionals in that specific field. For instance, a medical PC must be owned by physicians. Tenn. Code Ann. § 48-101-601 et seq. governs professional corporations.
• Non-Physician Ownership: Non-physicians cannot own entities that directly practice medicine or control clinical decisions. This means a lay entity cannot employ physicians directly to provide medical services. However, non-physicians can own Management Services Organizations (MSOs) that provide administrative and non-clinical support services to physician-owned professional entities.

Restrictions and Impact:

• Telehealth Companies: Telehealth companies that directly employ physicians or other licensed practitioners to provide clinical services must ensure they comply with CPOM. This often necessitates a Professional Corporation (PC) model where the clinical entity is physician-owned, and the telehealth platform operates as an MSO providing administrative services under a Management Services Agreement (MSA).
• Medspas: Medspas offering medical services (e.g., injectables, laser treatments) must operate under the direct supervision and control of a licensed physician. The entity providing the medical services must be physician-owned. Non-physician owners can own the aesthetic or spa component, but the medical services must be segregated and compliant with CPOM and physician supervision rules.
• Dental Practices: Similar to medical practices, dental practices must be owned by licensed dentists. Lay ownership of dental practices is generally prohibited.
• Wellness Clinics: If wellness clinics provide services that constitute the practice of medicine (e.g., IV therapy, hormone replacement therapy, weight loss programs involving prescription medications), they must adhere to CPOM. This typically means the medical component must be physician-owned and operated, even if the broader wellness brand is not.

Fee-Splitting: Tennessee has strict prohibitions against fee-splitting and kickbacks (Tenn. Code Ann. § 63-6-225), which can be implicated if MSO arrangements are not carefully structured. Compensation to the MSO must be for legitimate, fair market value services and not tied to patient referrals or a percentage of professional fees. The MSO model is the primary compliant structure for lay entities to support healthcare practices in Tennessee, requiring robust MSAs that clearly delineate administrative services from clinical decision-making and ensure the professional entity retains full control over patient care.

Tennessee has a robust framework for telehealth, codified primarily under Tenn. Code Ann. § 63-1-155 and rules promulgated by various professional licensing boards. The state generally supports the establishment of a provider-patient relationship via telehealth, provided certain conditions are met.

Establishment of Provider-Patient Relationship:

• Tennessee law explicitly permits the establishment of a valid provider-patient relationship through telehealth technologies, provided it meets the standard of care that would apply to an in-person encounter. This means a prior in-person visit is generally not required to initiate care via telehealth.
• The practitioner must conduct an appropriate examination and history, utilize diagnostic and treatment services, and develop a treatment plan consistent with the standard of care.

Permitted Modalities:

• Synchronous Audio-Visual (Live Video): This is the preferred and most widely accepted modality for establishing a new patient relationship and for most telehealth services. It allows for real-time interaction and visual assessment.
• Synchronous Audio-Only (Telephone): While live video is preferred, audio-only telehealth is permitted for certain services, particularly for follow-up care or when video is not feasible, provided it is clinically appropriate and meets the standard of care. However, for initial patient encounters involving prescribing, video is often implicitly or explicitly preferred by boards to ensure proper assessment.
• Asynchronous (Store-and-Forward): This modality involves the transmission of medical information (e.g., images, pre-recorded video, data) to a practitioner for review at a later time. It is permitted for diagnostic and consultative services, but generally not sufficient on its own for establishing a new patient relationship or for prescribing without a synchronous component.
• Remote Patient Monitoring (RPM): Permitted for collecting and transmitting patient data for review by a healthcare provider.

Telehealth Registration Requirements:

• As of 2025-2026, Tennessee does not have a separate 'telehealth license' or specific registration requirement solely for practicing telehealth if the provider is already licensed in Tennessee. However, out-of-state providers must hold a full, unrestricted Tennessee license to provide telehealth services to patients located in Tennessee. Participation in interstate compacts (e.g., Interstate Medical Licensure Compact - IMLC, Nurse Licensure Compact - NLC) facilitates multi-state licensure.

Informed Consent Requirements:

• Informed consent for telehealth services is explicitly required. Tenn. Code Ann. § 63-1-155(c) mandates that a healthcare provider must obtain informed consent from the patient, or the patient's legal representative, prior to providing telehealth services. This consent must include information about the services, the technology used, potential risks, and patient rights. The consent should be documented in the patient's medical record.

Geographic Restrictions:

• There are no specific geographic restrictions within Tennessee for telehealth services, meaning a licensed Tennessee provider can provide telehealth to any patient located within the state. The primary restriction is that the patient must be physically located in Tennessee at the time of the telehealth encounter for a Tennessee-licensed provider to render care.

Tennessee's prescribing rules for telehealth, particularly concerning controlled substances, are stringent and align with federal DEA regulations while adding state-specific overlays. The ability to prescribe controlled substances via telehealth largely depends on the establishment of a legitimate medical purpose and a valid provider-patient relationship, which typically requires a synchronous audio-visual encounter.

Controlled Substance Schedules Prescribable via Telehealth:

• During the COVID-19 Public Health Emergency (PHE), federal waivers allowed for the prescribing of all schedules of controlled substances via telehealth without an initial in-person exam. Post-PHE, the DEA has issued proposed rules to revert to pre-PHE requirements, with some exceptions. As of 2025-2026, it is anticipated that for Schedule II-V controlled substances, an initial in-person medical evaluation will generally be required, or the prescribing must occur under a 'qualifying practitioner-patient relationship' established through a synchronous audio-visual telehealth encounter, subject to specific DEA exceptions for certain conditions or follow-up care. Tennessee law (Tenn. Code Ann. § 63-1-155) generally defers to the standard of care, which implies that controlled substances can be prescribed via telehealth if clinically appropriate and a valid relationship exists, but this must be reconciled with federal DEA rules.

Specific DEA Requirements:

• The DEA's Ryan Haight Online Pharmacy Consumer Protection Act of 2008 generally requires an in-person medical evaluation before prescribing controlled substances via the internet. The PHE waivers temporarily suspended this. Future DEA rules will dictate the permanent exceptions, which are likely to include a synchronous audio-visual telehealth encounter under specific circumstances, particularly for non-narcotic Schedule III-V medications, or a referral from a practitioner who has conducted an in-person exam.

PDMP Checking Requirements:

• Yes, Tennessee mandates the checking of the Controlled Substance Monitoring Database (CSMD), the state's Prescription Drug Monitoring Program (PDMP), for all controlled substance prescriptions. Tenn. Code Ann. § 63-1-301 et seq. requires prescribers to check the CSMD prior to prescribing an opioid or benzodiazepine to a patient for a period exceeding a three-day supply, and at least annually thereafter for ongoing treatment. This requirement applies equally to telehealth encounters.

Quantity or Refill Limitations:

• Tennessee has specific limitations on opioid prescribing, including a 3-day limit for acute pain, with exceptions for surgery, trauma, cancer, and hospice care (Tenn. Code Ann. § 63-1-308). There are also dosage limitations based on Morphine Milligram Equivalents (MME). These limitations apply regardless of whether the prescription originates from an in-person or telehealth encounter.
• Refills for Schedule II controlled substances are generally prohibited. Schedule III-V substances may have up to five refills within six months, but the decision must be clinically appropriate and documented.

Special Rules for Specific Drug Classes:

• GLP-1s (e.g., Ozempic, Wegovy): While not controlled substances, prescribing GLP-1s for weight loss or diabetes via telehealth requires a thorough medical evaluation, diagnosis, and ongoing monitoring consistent with the standard of care. Boards will scrutinize prescribing practices to ensure appropriateness and prevent off-label or inappropriate use without proper medical oversight.
• Testosterone/Hormone Therapy: Prescribing hormones via telehealth for conditions like low testosterone requires comprehensive lab work, a detailed medical history, and ongoing monitoring. The TBME emphasizes that such prescribing must be medically necessary and not solely for performance enhancement or anti-aging without a clear medical indication.
• Stimulants (e.g., Adderall, Ritalin): These are Schedule II controlled substances. Prescribing stimulants via telehealth is highly scrutinized. Post-PHE, it is anticipated that an initial in-person evaluation or a very robust synchronous audio-visual encounter meeting specific DEA and state board criteria will be required. Ongoing monitoring and PDMP checks are mandatory.

Tennessee's scope of practice for mid-level providers, particularly Nurse Practitioners (NPs) and Physician Assistants (PAs), is defined by statute and board rules, generally requiring some level of physician collaboration or supervision.

Nurse Practitioners (NPs):

• Collaborative Practice: Tennessee does not grant full practice authority to NPs. NPs must practice under a 'collaborative practice agreement' with a licensed physician. Tenn. Code Ann. § 63-7-207 outlines the requirements for this agreement. The agreement must define the scope of practice, the methods of consultation, referral, and review of patient records, and the process for handling emergencies. The collaborating physician is responsible for the overall medical care of the patient and must be readily available for consultation.
• Prescriptive Authority: NPs with a certificate of fitness to prescribe (CFP) can prescribe legend drugs and controlled substances (Schedules II-V) under their collaborative agreement. The agreement must specify the categories of drugs that the NP can prescribe. Specific rules apply to controlled substances, including the requirement for a DEA registration and adherence to state PDMP regulations.
• Supervision: While 'collaborative practice' is the term, it implies a level of physician oversight. The physician is not required to be on-site but must be available for consultation and review of patient charts as outlined in the agreement.

Physician Assistants (PAs):

• Supervision: PAs in Tennessee practice under the 'supervision' of a licensed physician, as defined in Tenn. Code Ann. § 63-19-101 et seq. and rules of the Tennessee Board of Medical Examiners. The supervising physician is responsible for the PA's medical acts. The supervision agreement must be filed with the TBME and outline the scope of practice, delegation of medical tasks, and methods of supervision.
• Prescriptive Authority: PAs can prescribe legend drugs and controlled substances (Schedules II-V) under the supervision of their collaborating physician. Their prescriptive authority is delegated by the physician and must be within the PA's scope of practice and the physician's specialty. Similar to NPs, PAs must have a DEA registration for controlled substances and comply with PDMP requirements.
• Delegation: The supervising physician delegates medical tasks to the PA. This delegation must be appropriate to the PA's education, training, and experience, and within the physician's scope of practice.

Medical Assistants (MAs) in Medspas:

• Medical Assistants are unlicensed personnel. Their scope of practice is extremely limited and generally restricted to administrative tasks and delegated clinical tasks that do not require independent judgment or advanced skills. In medspas, MAs cannot perform medical procedures such as injectables (e.g., Botox, fillers), laser treatments, or chemical peels. These procedures must be performed by a licensed physician, NP, or PA, or a licensed aesthetician under appropriate supervision for certain non-medical aesthetic services. Delegation to MAs for medical procedures is strictly prohibited. The supervising physician is ultimately responsible for all services rendered in a medspa setting and must ensure that all personnel operate within their legal scope of practice.

Navigating business structures in Tennessee healthcare requires careful consideration of CPOM, fee-splitting prohibitions, and professional licensure laws. The Professional Corporation (PC) – Management Services Organization (MSO) model is the predominant compliant structure.

PC-MSO Structures:

• When Needed: The PC-MSO model is essential when a non-physician or lay entity wishes to manage or invest in a healthcare practice that provides services constituting the 'practice of medicine' (or other licensed professions like dentistry). The PC (or PLLC) is the clinical entity, owned solely by licensed professionals (e.g., physicians), which directly employs the practitioners and provides the medical services. The MSO is a separate, non-clinical entity, which can be lay-owned, providing administrative, managerial, and non-clinical support services to the PC.
• Management Services Agreement (MSA): The relationship between the PC and MSO is governed by a comprehensive MSA. This agreement must clearly delineate the services provided by the MSO (e.g., billing, scheduling, marketing, real estate, equipment, non-clinical staff) and ensure that the PC retains full control over all clinical decisions, patient care, and employment of clinical staff. The MSA must be structured to avoid any appearance of the MSO controlling the practice of medicine or engaging in fee-splitting.

Fee-Splitting Rules:

• Tennessee has strict anti-fee-splitting laws, primarily found in Tenn. Code Ann. § 63-6-225, which prohibits physicians from sharing professional fees with or paying commissions to unlicensed persons for patient referrals or services. This extends to other licensed professionals. The MSO's compensation must be for legitimate, fair market value services provided and cannot be based on a percentage of professional fees or patient revenues in a manner that constitutes illegal fee-splitting or kickbacks. Common compliant compensation structures include fixed fees, per-service fees, or cost-plus arrangements.

Professional Corporation Requirements:

• Tenn. Code Ann. § 48-101-601 et seq. governs professional corporations in Tennessee. A PC must be organized for the sole purpose of rendering professional services, and all shareholders must be licensed in the profession for which the corporation is organized. For medical PCs, all shareholders must be physicians. The corporate name must typically include 'P.C.' or 'Professional Corporation'. These entities are subject to the rules and regulations of their respective licensing boards.

How to Structure Ownership for Compliance:

1. Clinical Entity (PC/PLLC): Establish a Professional Corporation (PC) or Professional Limited Liability Company (PLLC) owned 100% by licensed Tennessee practitioners (e.g., physicians for a medical practice). This entity holds the clinical licenses, employs clinical staff, and provides direct patient care.
2. Management Entity (MSO): Establish a separate, non-clinical Management Services Organization (MSO) that can be owned by non-physicians or investors. This entity provides all non-clinical support services.
3. MSA: Execute a robust Management Services Agreement (MSA) between the PC and MSO, detailing the services provided, fair market value compensation, and explicitly stating that the PC retains sole control over all clinical decisions.
4. No Fee-Splitting: Ensure all financial arrangements, including MSO fees, comply with anti-fee-splitting and anti-kickback laws. Avoid compensation models that are a direct percentage of professional fees or patient revenue, unless structured carefully by legal counsel to comply with safe harbors or exceptions.

Tennessee continues to evolve its healthcare regulatory framework, with several key developments and ongoing legislative considerations anticipated for 2024-2026.

Telehealth Legislation:

• While Tennessee has codified many telehealth provisions, there's ongoing legislative interest in refining definitions, payment parity, and cross-state licensure. Bills may be introduced to further clarify the circumstances under which audio-only telehealth is permitted for initial encounters, particularly for controlled substances, aligning with anticipated federal DEA rules. Expect continued efforts to ensure telehealth payment parity remains robust for certain services.

Interstate Compact Participation:

• Tennessee is a member of the Interstate Medical Licensure Compact (IMLC), facilitating expedited licensure for physicians. The state is also part of the Nurse Licensure Compact (NLC), allowing RNs and LPNs to practice in other compact states with a multi-state license. Expect continued promotion and utilization of these compacts to address workforce shortages and facilitate telehealth expansion.

Controlled Substance Prescribing Updates:

• The most significant anticipated changes will stem from the DEA's final rules regarding controlled substance prescribing via telehealth post-PHE. Tennessee's boards are likely to issue guidance or update their rules to align with federal mandates, potentially requiring an initial in-person visit or a specific synchronous audio-visual encounter for certain controlled substances. This will be a critical area for monitoring in 2025-2026.

Enforcement Actions:

• The Tennessee Board of Medical Examiners and Board of Nursing continue to actively enforce standards of care, particularly in areas like chronic pain management, inappropriate controlled substance prescribing, and cosmetic procedures in medspas. Recent enforcement actions have focused on providers operating outside their scope of practice, inadequate supervision of mid-levels, and improper delegation to unlicensed personnel. Companies should anticipate continued scrutiny in these areas.

CPOM Scrutiny:

• While Tennessee has a clear CPOM doctrine, there's always potential for increased scrutiny of MSO arrangements, particularly concerning fee-splitting and the degree of control exercised by the MSO over clinical operations. Boards may investigate arrangements that appear to circumvent CPOM or compromise physician independence.

For healthcare companies entering or expanding in Tennessee, a structured approach to compliance is essential to mitigate risks and ensure sustainable operations.

Step-by-Step Compliance Checklist:

1. Entity Formation: Establish the appropriate legal entities. For clinical services, form a Professional Corporation (PC) or PLLC, ensuring 100% ownership by licensed Tennessee practitioners. For administrative services, form a separate Management Services Organization (MSO).
2. Licensure: Ensure all practitioners (physicians, NPs, PAs, etc.) are fully licensed in Tennessee. For telehealth, verify that out-of-state providers obtain a Tennessee license or utilize interstate compacts where applicable.
3. Collaborative/Supervision Agreements: For NPs and PAs, establish and file comprehensive collaborative practice agreements or supervision agreements with the respective boards (TBME, TBN) as required.
4. Management Services Agreement (MSA): Draft a robust MSA between the PC and MSO, clearly defining services, compensation (at fair market value), and explicitly stating the PC's clinical autonomy. Have this reviewed by Tennessee healthcare legal counsel.
5. Telehealth Protocols: Develop clear internal protocols for telehealth, including patient identification, informed consent, documentation, and emergency procedures. Ensure compliance with modality requirements (e.g., synchronous audio-visual for initial prescribing of certain medications).
6. Prescribing Compliance: Implement strict protocols for controlled substance prescribing, including mandatory PDMP checks, adherence to state quantity/refill limits, and compliance with anticipated DEA telehealth prescribing rules.
7. Scope of Practice Adherence: Ensure all clinical staff, especially mid-levels and unlicensed personnel, operate strictly within their defined scope of practice. Provide ongoing training and monitoring.
8. Data Security & Privacy: Implement HIPAA-compliant data security measures for all patient information.

Common Pitfalls to Avoid:

• Ignoring CPOM: Attempting to operate a medical practice with lay ownership or control over clinical decisions without a compliant MSO structure.
• Improper Fee-Splitting: Structuring MSO compensation as a direct percentage of professional fees or patient revenue without legal review.
• Inadequate Licensure: Providing telehealth services to Tennessee patients without proper Tennessee licensure for the rendering provider.
• Insufficient Telehealth Consent: Failing to obtain and document explicit informed consent for telehealth services.
• Non-Compliant Prescribing: Bypassing PDMP checks, exceeding prescribing limits, or prescribing controlled substances via telehealth without meeting federal and state requirements.

Timeline Expectations:

• Provider Licensure: 2-6 months, depending on the board and completeness of application. Interstate compacts can expedite this.
• Entity Formation & Agreements: 1-3 months for legal drafting and filing of corporate documents and MSAs.
• Credentialing & Enrollment: 3-6 months for commercial payers and potentially longer for TennCare (Medicaid).