Building a telemedicine practice? Hosts Phoebe Gutierrez and Leo Damasco break down PC MSO structures, when you really need them, common misconceptions, high setup costs, and smarter ways to scale without going all-in on 50 states from day one. Ideal for physician entrepreneurs eyeing independence.
Confused about PC MSO setups in telemedicine? You're not alone. Many physicians jump in without knowing the full picture.
In this episode of Telemedicine Talks, hosts Phoebe Gutierrez and Leo Damasco dive into the realities of Professional Corporation (PC) and Management Services Organization (MSO) structures for telemedicine practices. Drawing from personal experiences, Leo as a PC owner plugged into existing setups. They debunk myths like the "one-size-fits-all" friendly PC model for nationwide scalability. They discuss Corporate Practice of Medicine (CPOM) rules, state-by-state variations, and why solo physicians might not need an MSO if they're not hiring others or taking investors.
Key insights include the high costs (up to $150K–$200K) of a full 50-state rollout, including legal fees, registrations, DEA, and malpractice; the misconception that you must start big to avoid missing opportunities; and strategies for bootstrapping in 1–3 states first to validate and expand based on demand. They emphasize starting small, avoiding FOMO-driven overexpansion, and competing with giants like Hims & Hers through personalized, local services. The conversation also touches on operational hurdles, regulatory shifts, and the mindset shift for risk-averse physicians to embrace entrepreneurship.
Whether you're a burnt-out doctor eyeing telehealth independence or scaling an existing practice, this episode offers practical advice on compliance, funding, and building sustainably, and a shoutout to their spot on the Doctor's Podcast Network.
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Telemedicine Talks explores the evolving world of digital health, helping physicians navigate new opportunities, regulatory challenges, and career transitions in telemedicine.
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[00:00:00]
Welcome back everybody to telemedicine talks. As always, we got our host, Phoebe Gutierrez. And this is Leo Damasco. Thanks for joining. so today I wanted to talk with Phoebe about PC MSOs. You've heard this term a lot. we've talked about this a lot and, personally I'm a PC owner and I have a general idea, but the way I got into it is, there was a telemedicine company and they've created a PCM so structure already and they had an MSO and they had investors so forth and so on.
So basically, I joined them and really plugged in play as. Their PC owner associated with MSO, but recently, I got to start thinking about, and people started asking questions about the PC MSO structure from the eyes of a physician, entrepreneur,
But, some of the questions that I've run into is, Hey, [00:01:00] do I really need A-P-C-M-O structure? Can I work without it? since you are the physician, right? And you're creating this practice group.
the CPOM rules don't necessarily apply to you, right? They don't apply to you, right. Because you are the physician owner. Right? Go ahead. Yes, interject. So I think this is a really great topic. Mainly because I think there's a lot of misconception. So I think that everybody thinks that there's kinda like a one size fits all.
We love to use the whole like, oh, friendly PC structure, like your telemedicine, right? Like you're gonna get a 50 state PC and you're gonna do this like one PC hub in this state. Then you're gonna go get foreign qualification and blah, blah. Like we've heard the talking points a thousand times from like a thousand different, companies. Yeah. Yeah. That is basically what it is right now. Kind of like the most common scalable, kinda like fail proof is what I can say. And this is if you wanna practice in all 50 states, if you thinking right like [00:02:00] you're going to, either from the get go or very quickly, have a 50 state practice being everywhere.
Right. Yeah. Well, and I think that the interesting, perspective is it's all state by state, so unfortunately it is really kind of like digging into every single state requirements. Now, the key difference between a physician owner, like the PC MSO structure from just a physician versus. A group, I guess you could say.
Mm-hmm. Now when you say group, like physician owner to group, are you talking about a group of physician or are you talking about, kind of a, varied group including non physicians, just current with that.
Just clinical staff. And I guess I do wanna preface this conversation because like one, I'm not a lawyer, which everybody should. Yeah. no. Good. Number two is, [00:03:00] this is after having many conversations with many different types of, like organizations and law firms. So I'm really going to just be sharing what I've seen, and based on my own assumptions, everybody needs to kind of like do their own due diligence and make sure that they are, talking to the right folks, but my understanding is the key difference between needing A-P-C-M-S-O structure versus just a PC is if that physician hires anybody. For example, I have, heard from law firms that, if a physician is a single provider entity, they can, independently work.
Under, the pc, if they hire a secondary provider, that is what changes the dynamic because now you are not just controlling your own clinical decision making, but you're also kind of supervising another clinical provider. [00:04:00] where's the compliance safeguards is there, you know, that's the piece I think that gets that's the miss.
So it ultimately all has to do with how you, as the physician are structuring this. Are you building a business? Are you building a brand? Are you building something where you're gonna have a bunch of people contracting with you, or are you solely just doing this so you can provide care independently?
Now, does it matter, like, 'cause you're gonna need to establish a pc, right? If you are gonna practice, You're gonna need to establish a PC in the states that you're practicing in, right? Absolutely. Now, can't you just hire that second provider under the PC and not have an MSO?
Can't the PC just run the business just as like a brick and mortar would, like if I decided to run a private practice here in Hawaii, and I'm like practicing. I was like, oh, I need a partner. Then I grab a partner, right? I hired that partner under the PLLC or kind of the PC structure, right?
The LLC structure that [00:05:00] I've created here in Hawaii. I don't need to run MSO pc, right? Can I just do that, in the telehealth space? I think so. I think it ultimately then depends on like what services you're outsourcing to make yourself whole, right? Yeah. So again, it's like as you're bringing on somebody, did you credential them?
Did you verify their license? Did you make sure they're like a legitimate provider? Yeah. Or not. I think the other thing that kind of comes into play, a little bit is I think there is a strategic rationale behind why people do the PC MSO structure from the ability of a payment.
So. There are, a bunch of like other types of services that you are kind of layering into your overall. Pitch or your package of how you're kind of like structuring those things. And I think that maybe, potentially for how those are distributed, how you are, recovering different compensation that might appear to be, [00:06:00] quote unquote higher than fair market value.
That's your mechanism for, again, making yourself whole without making it seem like you're. Charging above or below fair market value. But again, I mean, I have seen, from my experience I've seen it both ways. I've seen it kind of a little bit like all over the place.
So that's where, to me, I'm like, is there a right way or a wrong way or are there different operational ways that you can structure it within, compliance, that kind of meets. your ownership dreams and needs. Yeah. Now, depending on state too, right? If you're gonna take on investors, right?
And that's where I think it becomes really important to have this P-C-M-S-O, right? Because then if it's nonclinical investors, then they can't necessarily own the PC in a lot of states, This is where CPOM rules come in, right? So, you're gonna need to establish that. But one thing that I've been [00:07:00] finding too is that there is a thought process out there that you need to establish this PC MSO structure, and then you need establish a 51 PC immediately if you're thinking about building a 51 state telemedicine practice.
and what I've learned too recently is that you don't necessarily need to do that right away, right? Because what's the cost of that? The cost of establishing one of these things is what, 150, $200,000 at the end of it, I think it ultimately depends. I mean, most law firms charge like, to do all the contracts and all of that.
I don't know, you're probably looking at like 15, 20 grand and then, If you pay that same law firm to actually do the entity setting up, I think they charge you like 2000 estate, 1500 estate, which is crazy because it's literally like going to a website and like filling out state forms. But I digress.
They make it easy and they do all the stuff. So please don't come after me law [00:08:00] firms. And then you have your business registrations. So you actually have your business. Yep. Like you have the state filing, if there's any specific, like fees or whatever. Some states have even a telemedicine registration that you have to file.
That's an additional thing. Then you have, which I'm always gonna tell you, then you're gonna have your DEA registrations and you're gonna have your malpractice. all in all, yeah. you're looking at around like 150, 200 grand. To get it up and that is the most rigorous, most compliant, you are using, a solid healthcare law firm that is, comfortable, confident, and does these things.
Yeah. Where I think people struggle is like, you do not need to do this in 50 states. You can build a booming independent practice in one to three states. You can decide where you are seeing volume from, either referrals or partners. or even just have like an intake form on your website that [00:09:00] talks about like, I'm in Colorado, but I don't have a license there.
So, it's coming soon. You can collect data and then from there, expand in the way that you want. I think there is a really weird, like, in my opinion, kind of like misconception that you have to start 51, you have to go get funding, you have to do, all these things that sound really fancy just because like your friends at another group did it, or Yeah.
another company followed this process. Yeah. And looking back into it, I've talked to a few founders that are like, yeah, that's one of the misconceptions we had and they did it, but it did cost a lot and, upfront where they could have used the money elsewhere.
Right. they could have used the funds, prioritizing other things instead of doing that, and I've talked to a few, they're like, yeah. looking in retrospect, we would've started in a few states, And prove the concept and start scaling and then add from there.[00:10:00]
And, I was talking to the legal team that I work with, just asked him, Hey, how long does this actually take? And it, doesn't take relatively that long to add states to your PC or to form, qualify what, two, three months? Soit's not a dire need to start from the very, very beginning.
Yeah, it's an interesting, like fomo, but if we get somebody, we're gonna have volume. like it's this idea of like, oh, I'm gonna cast such a wide net that I'm gonna be able to, effectively, treat anybody and everyone. I could market everywhere, but to me, I just.
Sure. If you're like a VC backed company and you wanna throw a ton of money away on marketing and have like, customer acquisition cost of like a thousand dollars Per person. That signs up. I mean, like, yeah, go for it. I mean, it's what all the large companies do, but
I think from, me, who, my area of expertise is always like, how can we bootstrap this? How can we keep it as cheap as possible? right. How can we do it to where you can get that validation [00:11:00] you need versus scaling up too quickly and then it becomes like unwieldy? for me it is, you can make a really, really, really good amount of money in one state.
Right? Yeah. You wanna expand? pick a second state, pick three states. You don't, I jokingly tell people all the time is like, you wanna do all 51 state, man, let's just do California. You can be a multimillionaire just focusing on California. So to me I think there's the idea of I don't wanna let these opportunities go.
I wanna be able to see all the patients. In reality as an independent physician like you can't support that many. So it ultimately is, I say start small. Start low, yeah. And go that route. Yeah. if you do have aspirations to go big, then Yeah.
Then scale, then scale, surely, but slowly. But yeah, I've seen a lot of companies, Especially after the COVID bill. Right. Everybody got so excited. Right. And there's a lot of companies [00:12:00] that figured out how to do the 51 state thing and, reach all the states.
But even those bigger companies, what we saw was that They had to scale back. 'cause yeah, it was either too expensive to work in one state or because of state laws and emerging state laws. Right. they had to scale back and It wasn't worth it, the cost of patient acquisition per patient in certain states just isn't worth, pouring all that money upfront into it.
Yeah, and I think that the interesting thing is like I have clients that are in like really small states and just kind of went like balls to the wall in those states. And even the states where you're like, Who wants to do this in Iowa? And it's like, well, they have a booming business in Iowa and it's, yeah, you know what I mean?
I think a lot of it has to do with, again, getting the referrals, getting up to speed, making sure you have all of that. I actually think it makes you more attractive to be. [00:13:00] In less states than to be more global and everywhere because then you really are, you're competing. I mean, depending on what you're offering, you are competing with a HIMSS and hers.
You are competing with a row. You are competing with these like massive companies that are one, you are never going to be able to match what they're marketing at. And to me it's like if you wanna take the little more like intimate, local, it's the easier and smarter route.
And, I think that's the way to go, right? Because these big widespread direct to consumer platforms, and name a new one that's really just come out in emerge, ever since the big ones in the beginning, right? I name a bunch that have gone away.
That have been swallowed up by other bigger platforms as well. But I think you're right, it's the determinator now, or the thing that's gonna set you apart now is going to be that more personalized service that more, it's not necessarily that much quantity, but something different that you [00:14:00] could offer.
Yeah. And like I will say, I'm, very biased in some of these things. there are plenty of companies that have built super solid foundations that are 51 states that are, doing really cool and interesting things. So it is possible, you can absolutely do it. All I'm saying is like, it's a significant investment, not just money, but time.
the operational hurdles that you have to go through to launch a national practice. I have clients that are in what, 10 states? I can't even keep up with the 10 states, let alone imagine trying to. Keep track of, 51 and how things are routed and supported. it opens up so many cans of just such a larger can of worms.
that is, to be perfectly honest, like traditionally, like from a regulatory lens it's not supposed to be like this right there. You're not supposed to [00:15:00] be in all of these states doing all of these things all the time. Yeah. and it's gonna be interesting to see how we're kind of seeing it now, right?
And we're seeing kind of different regulatory processes in each state, right? and how each state is gonna approach this, right? especially with medications, treatments that may not necessarily be fully mainstream or treatments that are very controversial. You're already seen it already, kind of the GLP ones.
You've seen it already in, the medical abortion marketplace as well. So yeah. Yeah. interesting to see. Yeah, I think that it is, you have a lot of things to consider before going, I'm gonna get a 51 state pc. Yeah. Yeah. And it's funny, because, I was talking to the legal team too, and that's one of the first things that they said, I was like, Hey, I was like, I'm gonna go big. I want to think about this F1 state pc, see how it goes. And they were like why? How realistic is that? what kind of business are you going to try to do?
And really, for me it [00:16:00] was like, I was going. Just kind of like you said, it was the whole FOMO thing. It was, Hey, I want to be as available as I can. Right. being a 50 state practitioner that has paid off, it's worked that, yeah. Using that leverage of availability has worked really well for a lot of us.
50 ones and it's, resulted in very good lives for a lot of us. Yeah. But I think taking that approach when you're building. may not necessarily be the best approach. Yeah. Again, yeah. And what's so funny to me is that I keep pitching the same idea to people because again, you talk to every physician that gets to a certain point in their.
Career, and I wanna get outta the hospital, or I wanna even like telemedicine. I mean, I'm now even getting contacted by like, you doctors that are like, well, I've been doing telemedicine for five years and I'm burnt out. I'm done. I'm like, okay, all right. what? Yeah. and so the interesting thing to me is it's like, why don't all of you, [00:17:00] physician owners, I don't know, connect and like build a national telemedicine company by yourselves. Like, each of you take five states and like, boom. There, like, it's a little bit more digestible and easier for you all. I mean, it would also be really cool to have different specialties and, yeah.
A physician forward thing, which to me I don't know. Leo, you're the one that's connected to all these 51 state doctors. Yeah. No, getting on everybody on the state page it is difficult. Right. And it's also, well, a lot of times too, it's like, I don't wanna do the work. I'm doing this because I don't wanna do the work.
Right. and putting the work up front. You're right. We're all burnt. We're all burnt. And a lot of us are in this space because yeah we are trying to do something else and trying to support ourselves so we have the availability to do something else, right. yeah. Yeah, it'd be interesting to see the [00:18:00] subspecialists come into this as well.
there's a lot of generalists, so forth and so on. But seeing a lot of subspecialists coming in and creating another practice and maybe I haven't seen it much, but Yeah. You see little pockets here and there, but, nothing that spread out. Yeah. No, it's kind of been like a little interesting observation.
I think everybody has kind of a different idea and like. Man, all it is all your time. The most interesting thing to me is you talk to a NP or a pa or they have overhead from day one, not just the business registrations and the legal fees and the this and the that. I mean, they have to pay you, like they wanna open their doors.
they need a supervising doctor or a collaborating doctor or a PC owner. And to me, physicians have none of that. So it's just, your time. Yeah. So to me it's like when you actually start to think about it and come into, how you could potentially do it and do something that are interested in.
it does make it a little bit more digestible from the doctor lens. Yeah. Yeah. And again, it [00:19:00] goes back to, hey, That kind of mindset, we've talked about this over and over again, right. just that transition. It's also kind of scary for us too, right?
It, it's something that we haven't done before. getting over that and the imposter syndrome that comes with it. can I actually do this? Am I the right person to do this so far and so on. Yeah. But like, don't you ever think in your head sometimes that like.
Screw it. I'm just gonna say what's on my mind. You have these 23-year-old kids that are building these companies pretending to know what the hell consumers need in healthcare. They're getting millions of dollars. They're turning these companies into like I'm just putting a call out there saying like, physicians are so much more positioned, you all are a lot more risk adverse and I think you are a lot more kind of set in your ways a little bit and a little bit scared, but to me that's what I have to tell myself.
If like that 22-year-old kid that knows nothing about life can [00:20:00] go build a company, then oh my God, I can build my consulting firm. Get your panties outta the bunch and just go do it. I think you kind of mentioned one of the biggest reasons why is, well, one, yeah. we are very risk averse.
You know what I mean? it's just not in our training. Also, there are some doctors that are out there too. Right. But now what you're seeing too is kind of the dichotomy of medicine versus, like this traditional medicine versus non-traditional medicine and.
Now there's kind of a pushback against the old establishment and where are you gonna fit in that too? So, but you're right. Again, it's that mindset, It's tough to convince, especially, the older docs, the ones that are actually burnt out to actually do that.
'cause it's just not anything we've trained for. Yeah. But I think, I will say. That looking back over the past two years of kind of building my own thing and really coming into my own, not, I mean even just the podcast, right, Leo? Like, yeah, we took a uncomfortable turn and was like, let's go [00:21:00] do this podcast.
And oh my gosh. Now people are like telling us they listened to episodes by the number and we're like, right. The joke for me has been, I kept thinking that there was this moment in my life that I was gonna be so happy that I got there. Right. I've accomplished this thing.
I'm there, I'm done. And. This just in 2026, I've really stopped focusing so much on the destination and just really am enjoying the journey. And like every day is different. I have my good days, I have my bad days. I'm learning stuff, but I'm trying my hardest. We all kind of are. And to me, I think that's the mindset.
I want physicians and anybody who is interested in this space to take that, right? Like remember the why you wanna do this. Don't stress yourself out thinking you need to be somewhere because that person's there, like, I'm here play and I'm enjoying this, right?
I thrown out this proposal or doing this thing like we are learning and growing and [00:22:00] evolving and I think. To me, that is what I'm going. I personally attribute a lot of that to my own happiness because when I thought I was the expert and all the things, I just got bored. It wasn't fun anymore. Like I burnt myself out.
Now it's a matter of like, every day's a little different and I get to help people and, I get to kind of lean into, different things and it's so much more rewarding and it's very scary. especially with like, lawyers. absolutely. and mind you, I love my legal team, so I'm gonna put that disclaimer out.
I love care of Yeah, yeah. No, it's definitely a scary thing to think about. yeah. And talk about versus averse, right? luckily, for the better on my side. They love to protect me. So at God for y'all. But still, it is a minefield that a lot of people don't wanna step in, especially from, the doctor side.
Yeah. [00:23:00] Yeah. It is, to me I do really love getting to see more doctors kind of step into the driver's seat. Doing some of these things, coming up with really cool ideas. And some are large, some are small, some are just, getting them outta the hospital and, getting to stay home.
but it's all in all, the funniest part about it is like physicians are the. Best positions to do this. So Yeah. And it's fun to see, a bird out doc finding their, sparking it too, right? it's fun to see kind of, I've seen a lot of, contemporaries that are like, yeah, this is fun for me.
This is one of the reasons why I went in, I'm doing what I like doing and this is great, being able to exercise this part of my brain again or ever, yeah. Yeah. And yeah, we're just having fun. We're just having fun like the kids do these days, like Gen Z.
Yeah. Don't get me started. these kids nowadays, yes definitely getting, starting to feel old, especially when I go back to brick and mortar and the rare times I'm like, oh [00:24:00] gosh. Yeah, I posted something On my social media, and it was like a video and it was, this lady interviewing people just like going like, interviewing people.
It's like, who has the worst style? And everybody was like, millennials. And it's like these kids, and they're literally wearing clothes that we wore. Oh yeah. like the baggy jeans are back in. I saw that one. The girls with like the little tube tops. I'm like, right. I got a tube top. I could pull that thing out.
Do you guys want, I saw another one that was like, Hey, what year, does the person have to be born in when once you start considering them old and they're like 1990s rap. Yeah. 1990s. That was the answer. I blew by that a long time ago, yeah. Yeah. I know.
are you seventies or eighties? 79. Yeah. Barely made the seventies. Dang. Wealth of knowledge, experience is what makes Yeah. Right. Notes. Yeah. this took a away [00:25:00] turns.
No, but, from Mc or from P-C-M-S-O talk to how old I really am. It's amazing. You know?
I think that the biggest rule with thumb, I think is like, there's different structures, there's different ways that you can do, but do it. Talk to, your legal team, they should give you a recommendation on what to do.
And if you don't have a legal team, like Leo seems to have a great one. I have a really great legal team. there's a bunch that we could help Yeah. Hook you up with. Yeah. And you can't do this without one. You really can't. And I think getting them in from the very, very beginning and actually being open to their questions.
Definitely going through the process and talking with the legal team, this kind of what sparked kind of the question and in this episode was, you know, the questions that they had for me and I actually had to think about it and answer and a lot of times I didn't have a real good answer, so I had to go back and just think about it.
So, but Yeah. Well, there's a lot to think [00:26:00] about. I mean, I think that the interesting thing is one of the big misconceptions is I'm gonna get a, 51 state, or I'm gonna get A-P-C-M-S-O and that the lawyers are actually gonna tell you how to operationalize it.
Yeah. if you have a good lawyer, they're gonna ask you well. Why 51 state, why do that from the very get go? what's your actual reason for that? Maybe you could save some money. You know what I mean? Yeah. I think that's a mark of a good legal team is really just watching out for you, your finances.
not just kind of your legal standing as well. So, yeah. Nope, Absolutely. I agree. Well, thanks everyone for another episode of hearing me talk the whole time. And Leo laugh. I didn't have to do a lot of Googling this time around. There's not a lot of compliance terms, but no thank you for your welcome wisdom.
And, everybody, thank you for joining us. And hey, just wanted to give a shout out to y'all part of the DPN network. We were given a [00:27:00] certificate, I should show it next time, right? What, like the numbers, the third most listened to part of the DPN network and the Doctor's Podcast network. So just wanted to thank everybody and all the listeners out there for.
Yeah, well, Phoebe has a lot of great things to say, but putting up with me and just listening to me, ramble most of the times and trying to find things to say. So thank y'all for listening and, we will check you out next time. Thanks y'all.
Did you press record? I think you did. Did you? I can't stop it.
I'm a, um. I was a guest. How do I stop this now?
Uh, I don't have a stop button.
I really don't.
Um, we need to [00:28:00] be bloopers. We need to do like a blooper reel, like my kids yellow, like kind tacos, tacos,
caritas tacos. I wanted, I remember like a long time ago we were saying like, I wanted to do one with like the kids. Like ask a doctor. Yeah, yeah, yeah. I wanna do that again. Um, yeah, do that. Did it. But, um, and your family members too, right? We had that set up and then I think they all got sick. Yeah. Yeah.
There's some other stuff I want to, I think it would be really fun to bring back Husen and Mark. I texted Hannah, but she hasn't, I don't think she followed up with 'em, but, um, you don't bring back two is. Um, oh, he's gonna be very vocal. I love it. Is blanking. I'm blanking. I text him like every other day.
Monsour. Yeah. Yeah, the a t a's starting too. And he's the a t's coming up in a couple months and, um, he's a big conference guy, so I [00:29:00] wanna talk to him about conferences and what he does and stuff. Dude, he's starting his own thing, but this is where like, I, I think that like, it just makes so much more sense if you try to tag team it with somebody else.
If he's, he's such a busy body, I'm like, dog, you need to pull somebody else to help you. Yeah, and it's like, it could be, I'm down the hill, but like, if you wanna like divide and conquer with another physician, go find somebody. I mean, he's, he's very big in the like, lifestyle food is medicine.
Oh yeah. Yeah. He needs somebody with like that vibe, oh, there it is. What the hell? It was in another window.