This one is minor and diagnostic. Kansas professional corporations use the designation “PA” — Professional Association — rather than “PC”.
It is a small thing. It is also the kind of small thing that tells you whether the person drafting your documents has formed a medical entity in Kansas before, or is adapting a template from somewhere else. If the draft says PC, ask what else came from the other state.
The substantive rule behind the name
Kansas prohibits general business entities from engaging in learned professions such as medicine, either through employing or contracting with licensed physicians. The exception is narrow: a professional corporation or limited liability company wholly owned by licensed professionals.
Wholly owned. Not majority, not controlled — wholly. There is no minority position available in the Kansas medical entity for an investor, a manager or an unlicensed partner.
What that leaves for non-licensees
The management services organisation, on the usual terms: separately owned, providing premises, technology, marketing, staffing administration and billing operations, paid a fixed fair-market fee for services actually delivered.
And it has to be genuinely that. Kansas reaching contracting with as well as employing means a services agreement that functions as an employment relationship over the physician is not outside the prohibition because of how it is labelled.
The delegation and licence-use provisions sit on top
KSA 65-28,127 governs delegation and supervision by licensees. And KSA 65-2837(b)(15) makes it a ground for discipline for a physician to let another person or entity use their licence to practise — which is the provision that catches a wholly-owned entity whose physician owner is nominal.
Getting the entity form right and the involvement wrong satisfies the first rule and fails the second.
A short Kansas formation checklist
- Is the entity a professional association or LLC, wholly owned by licensed professionals?
- Does it carry the correct designation?
- Is every owner licensed, today?
- Is the management agreement a services agreement in substance, with a fixed fair-market fee?
- Can the physician owner evidence that the licence is being used by them — protocols, delegation decisions, chart review?
- Have you read the Kansas Board of Healing Arts’ guidance on corporations?
Related reading
Frequently asked questions
Why do Kansas medical entities say PA?
Kansas professional corporations use the Professional Association designation rather than PC.
Can an investor hold a minority stake in a Kansas medical entity?
No. The exception requires the professional corporation or LLC to be wholly owned by licensed professionals.
Can a business entity contract with physicians instead of employing them?
Kansas reaches both employing and contracting with physicians, so relabelling the relationship does not move it outside the prohibition.
How do non-licensees participate?
Through a separately owned management services organisation paid a fixed fair-market fee for services actually delivered.
General information about Kansas entity formation, not legal advice. Confirm your obligations with healthcare counsel licensed in Kansas.