The vocabulary in this market is used loosely, and the looseness is expensive: a “medical director” who is a signature, a “standing order” doing work an evaluation should do, “FDA approved” attached to something that is not. These are the terms as regulators use them.
Corporate practice of medicine · Professional corporation · Management services organization · Friendly PC · Fee splitting · Medical director · Delegation · Standing order · Nurse protocol agreement · Prescriptive authority agreement · Full practice authority · Good faith exam · Asynchronous care · Ryan Haight Act · 503A pharmacy · 503B outsourcing facility · FDA approved · Business associate agreement
Structure and ownership
Corporate practice of medicine (CPOM)
The doctrine that a business corporation may not practice medicine or employ physicians to practice on its behalf, because clinical judgment must sit with a licensed clinician rather than with an owner. It is not uniform: California and New York apply it strictly, Florida does not broadly prohibit it, and Arizona is not a strict CPOM state at all.
Professional corporation (PC)
The entity that actually delivers medical services, owned by one or more licensed physicians. In CPOM states this is the only lawful vehicle for the clinical side of the business, and its ownership is the first thing a regulator checks.
Management services organization (MSO)
A separately owned company that provides everything which is not the practice of medicine — premises, technology, marketing, staffing administration, billing operations. It may be owned by non-licensees.
Friendly PC
A professional corporation whose physician owner is connected to the management side, used so that a non-physician business can operate lawfully alongside a physician-owned practice. Legitimate when the physician exercises real clinical authority; actionable when the ownership is nominal. See the full explainer.
Fee splitting
Sharing professional fees with a non-licensee. Commonly triggered by a management fee calculated as a percentage of clinical revenue. New York prohibits it outright; most other states treat it as a serious risk factor. Fixed, fair-market fees agreed in advance are the standard alternative.
Medical director
The physician responsible for the clinical side of a practice: approving protocols, delegating within scope, remaining available at the state’s required standard, reviewing charts and responding to adverse events. Requirements differ by state.
Supervision and delegation
Delegation
A physician authorising another licensed professional to perform a medical act. Delegation never expands the receiving license — it only authorizes within it, which is why an esthetician cannot be delegated an injection. Texas recognizes written delegation only.
Standing order
A pre-authorized instruction permitting a defined treatment for patients meeting defined criteria, without an individual order each time. Useful and widely used, but not a substitute for a patient evaluation where the state or the drug class requires one.
Nurse protocol agreement
Georgia’s instrument for physician delegation to an advanced practice registered nurse. Written, signed by both, reviewed annually, and capped at four APRNs per delegating physician.
Prescriptive authority agreement
The Texas instrument by which a physician delegates prescribing to a PA or APRN. It counts toward the supervising physician’s statutory cap, so capacity has to be confirmed before a staffing model is built around one physician.
Full practice authority
A state grant allowing a nurse practitioner to evaluate, diagnose, prescribe and practice independently of physician supervision. Arizona grants it outright; Illinois grants it on attestation of 250 continuing-education hours and 4,000 post-certification clinical hours.
Clinical process
Good faith exam (GFE)
The clinical evaluation a licensed provider performs before prescribing or authorising a treatment. It is what makes an order a medical decision rather than a transaction, and it must be documented. What it actually requires.
Asynchronous care
Care delivered without a live encounter — structured intake reviewed later by a licensed provider. Acceptable for many non-controlled therapies where a real review occurs; generally not available for controlled substances under the ordinary federal rules.
Ryan Haight Act
The federal law requiring an in-person medical evaluation before prescribing a controlled substance by means of the internet. It was never repealed; telemedicine flexibilities have operated as temporary exceptions, currently running to December 31, 2026.
Products and sourcing
503A pharmacy
A traditional compounding pharmacy preparing medications for an identified individual patient pursuant to a prescription. Compare with 503B.
503B outsourcing facility
A registered facility that may compound in bulk without patient-specific prescriptions, under CGMP requirements and FDA inspection. Different rules, different bulk substance lists, different use cases.
FDA approved
A specific regulatory status meaning the FDA has reviewed evidence and approved a drug for a stated indication. It is not the same as cleared, registered, or listed, and compounded preparations are not FDA approved. The four terms, distinguished.
Business associate agreement (BAA)
The contract required under HIPAA before a vendor handles protected health information on a covered entity’s behalf. Needed for any AI tool touching the clinical record, and frequently missing.
Definitions for orientation, not legal advice. Terms of art carry state-specific meanings and the underlying rules change. Confirm anything load-bearing with counsel licensed where you operate.