This article is part of a series on Delaware’s new Physician Associate Act. Start with Delaware’s New Physician Associate Act: What Changed and Who It Affects.
A growing number of physician associates deliver care remotely through an entity they own, contracting with a collaborating physician rather than working as that physician’s employee. It is an efficient structure, and Delaware’s House Bill 325, signed May 12, 2026, changes what it can look like.
Three questions drive the analysis. Does the collaboration cap follow a physician associate into telehealth? What does Delaware’s general telehealth statute require on top of the Physician Associate Act? And may a physician associate actually own the entity through which he or she practices?
The short answers are yes, a good deal, and probably. The details are where the structuring occurs.
Telehealth is within scope, and collaboration may be electronic
The Act lists among a physician associate’s authorized medical acts the use of telemedicine and the use of and participation in telehealth, and a physician associate may be designated a primary care provider by an insurer. (24 Del. C. § 1773.)
The collaboration rules were drafted to work remotely. Constant physical presence of the collaborating physician is not required on site, provided that the collaborating physician is readily accessible by some form of electronic communication. (24 Del. C. § 1770A.) Where the physician is not routinely present, adequate means and methods may include telecommunication, chart review, or other methods of communication and oversight. (24 Del. C. § 1771.)
One limitation survives all of this. The collaborating physician may not be involved in patient care in name only and must be involved in active patient care on a regular basis. A collaborating physician who signs an agreement, collects a monthly fee, and never opens a chart is therefore not a compliance structure; that arrangement places the physician’s license at risk and, by extension, the continuity of the practice that depends on it.
The cap applies to remote practice, but its exception does not
The four-physician-associate concurrent cap applies to remote practice unchanged. A collaborating physician may not collaborate with more than four physician associates at any given time. (24 Del. C. § 1771.)
The cap’s exception, however, is tied to physicians and physician associates practicing in the same “physical office or facility building,” and a distributed remote arrangement across multiple locations does not satisfy that language.
The result is somewhat counterintuitive. A telehealth practice has fewer compliance options than a brick-and-mortar practice, not more, because the exception most readily available to a physical clinic is simply unavailable to it. What remains is scheduling discipline, the addition of collaborating physicians, the use of physician associates holding independent practice authority, and an application to the Board for an exemption.
Telehealth rules apply in addition to the Physician Associate Act
Because physician associates are licensed by the Board of Medical Licensure and Discipline, they are authorized to deliver telehealth subject to the provisions of Delaware’s general telehealth statute. (24 Del. C. ch. 60.) That chapter imposes requirements entirely independent of the collaboration rules.
- A provider-patient relationship, which may be established in person or by telehealth, including verification of the patient’s location, disclosure of the provider’s identity and credentials, informed consent, a diagnosis by acceptable medical practices, a discussion of options, follow-up coverage, and a written visit summary. (§ 6003.)
- The same standard of care as in-person treatment. Treatment is held to in-person standards, and prescribing based solely upon an internet questionnaire or consultation is prohibited. (§ 6003.)
- An approved modality before diagnosis or treatment, meaning an in-person examination, another Delaware-licensed provider present at the originating site, diagnosis by audio or visual communication, or compliance with professional-society telemedicine guidelines, together with complete recordkeeping. (§ 6004.)
The statutory definitions of “telehealth” and “telemedicine” are broad, reaching real-time two-way audio-visual communication, audio-only communication where broadband is unavailable, and store-and-forward transfer. That last category is worth noting for image-based specialties such as dermatology, where the asynchronous workflow is generally the practice model rather than a fallback.
The patient’s location governs, not the provider’s
This point is frequently misunderstood and it is worth stating directly. Delaware keys telehealth authorization to the Delaware license and to the patient’s location and not to where the provider happens to be.
The statutory definitions confirm it. An “originating site,” meaning the patient’s location, “means a site in Delaware.” A “distant site,” meaning the provider’s location, “means a site at which a health-care provider legally allowed to practice in Delaware is located,” and carries no Delaware-location requirement. (24 Del. C. § 6001.) The operative trigger is verification of the patient’s location.
Two consequences follow.
- Delaware’s interstate telehealth registration is not the pathway for a Delaware-licensed physician associate. That registration exists for providers licensed in a state that has not adopted an interstate compact and who are not otherwise licensed in Delaware. A physician associate who already holds a Delaware license practices under the license authorization instead.
- Delaware law does not resolve the requirements of the provider’s home state. Chapter 60 governs the Delaware side only. It does not require a physician associate to be licensed where he or she physically sits, and it does not speak to that state’s law. Whether the state in which the provider is located independently regulates practice originating there is a separate, state-by-state question that Delaware law does not answer, and it should be cleared for every provider in every state from which that provider works. In our experience, this is the most common gap in otherwise well-constructed remote practices.
May a physician associate own the practice entity?
For a physician associate forming a limited liability company and contracting with a collaborating physician, this is the threshold question. The answer is a qualified yes, subject to one significant limitation and several open items.
Entity eligibility is not the obstacle
The statute defines a physician associate as an individual who “is licensed under this chapter to practice medicine as a physician associate.” (24 Del. C. § 1770A.) That satisfies the predicate in Delaware’s Professional Service Corporation Act, which extends eligibility to persons “duly licensed or otherwise legally authorized to render the same professional service.” (8 Del. C. §§ 603, 605.) Because the Act’s test is licensure or other legal authorization to render the service, rather than possession of a full physician’s certificate, a physician associate qualifies.
Delaware does not mandate a professional entity and has no professional LLC statute
The professional corporation regime is an optional overlay rather than the exclusive path, and Delaware has no separate professional limited liability company act. Professional services may accordingly be delivered through an ordinary limited liability company formed under the general Limited Liability Company Act. (6 Del. C. ch. 18.)
Physician associates coming from states that have a professional limited liability company form are often misled by the terminology. In Delaware, professional restrictions on ownership and transfer are written into the operating agreement by contract rather than supplied by the entity form itself. That is more flexible, but it also means that nothing protects the owners by default.
If a professional corporation is used, all owners must render the same professional service
Where a physician associate elects the professional corporation form, the same-profession ownership limitation applies. Every shareholder must be an individual duly licensed or otherwise legally authorized to render the same professional service, and the only multi-profession combination the Act permits is the practice of medicine together with the practice of podiatry. (8 Del. C. §§ 603, 610.)
The consequence is direct. A physician associate and a collaborating physician cannot co-own a Delaware medical professional corporation. For any arrangement contemplating shared equity between a physician associate and the collaborating physician, that limitation alone generally settles the entity choice in favor of the limited liability company.
The limitation to watch
Under 24 Del. C. § 1772(a), a physician associate “may not maintain or manage a location that does not have oversight by the physician associate’s collaborating physician.”
Read against a physician-associate-owned practice entity, the implication is immediate. A physician associate who owns the limited liability company but does not hold independent practice authority must have collaborating-physician oversight of that location. House Bill 325 did not repeal the provision; it carved out around it, exempting a physician associate granted independent practice authority from the section entirely. (24 Del. C. § 1772(i).)
For that reason, entity ownership and independent practice authority are not separate questions. For a physician-associate-owned practice, independent practice authority is not merely a convenience that eliminates a collaborative agreement. It is what removes the maintain-or-manage limitation on the practice location itself, and the two should be sequenced accordingly.
TIP: Where the 6,000-hour threshold is still some distance away, the practical structure is generally to form the entity now and to build genuine collaborating-physician oversight of the location into the collaboration agreement, rather than to defer formation. The entity can then continue unchanged once independent practice authority issues.
Ownership is not authority
Finally, and importantly, owning the entity does not authorize independent practice. The collaboration requirement runs to a physician associate’s clinical acts rather than to the ownership of the practice. A physician associate who forms an entity while still short of the 6,000-hour threshold has organized a business, not expanded a license.
Open items to consider before committing capital
Several questions in this area remain genuinely unresolved, and a physician associate building a practice around this structure should understand them at the outset.
- Corporate practice of medicine. Delaware has no clear position. No statute, reported decision, Board regulation, or Attorney General opinion squarely addresses whether an entity may employ physicians or physician associates to render medical services. The conclusion above therefore rests substantially on the absence of a prohibition rather than on affirmative authority, which is a materially weaker foundation even if it is the correct reading. (At least one commercial source in circulation asserts that Delaware enforces corporate practice restrictions through the Professional Service Corporation Act. That appears to be an over-reading, since the chapter binds only those entities that elect to organize under it.)
- Payor credentialing. Whether commercial payors will credential a physician-associate-owned entity in Delaware is not documented. The statute now provides that physician associates must be authorized to bill for and receive direct payment for the medically necessary services they deliver, and that no insurance company or third-party payer may impose a practice, education, or collaboration requirement inconsistent with or more restrictive than state law. Whether payor operations have caught up to those provisions is a separate question, and a statute only months old has likely not yet resolved it in practice.
- Delaware Medicaid. Published Delaware Medicaid materials appear to condition billing for physician associate services on the individual being in an enrolled practitioner’s or enrolled group’s employ, and those materials predate House Bill 325. The current posture should be confirmed with the Division of Medicaid and Medical Assistance directly rather than taken from the published manual. For a physician-associate-owned entity with meaningful Medicaid volume, this is a threshold question of viability rather than a detail.
- Federal law operates independently. Compensation flowing from a physician-associate-owned entity to a collaborating physician implicates the federal Anti-Kickback Statute and its personal services safe harbor, and where that physician also refers into the entity, the Stark Law is implicated as well. None of this was affected by House Bill 325, and all of it can defeat an arrangement that is entirely lawful as a matter of Delaware entity law.
Conclusion
A Delaware physician associate may very likely own the entity through which he or she practices, and a limited liability company formed under the general Limited Liability Company Act is ordinarily the appropriate form rather than a professional corporation. Independent practice authority is what removes the limitation on maintaining or managing the practice location, and it should therefore be sequenced ahead of the entity build rather than treated as a later upgrade. The four-physician-associate cap follows the practice into telehealth without the same-building exception that assists physical clinics. And the unresolved risk in this structure sits in payor credentialing and federal compensation analysis rather than in Delaware entity law.
For a physician associate building this kind of practice, the order of operations matters at least as much as the entity documents. We generally recommend confirming the hours, identifying the applicable application track, testing payor credentialing early, and structuring the collaborating physician’s compensation against the federal safe harbors before any agreement is signed.
Also in this series: [the overview], [how the four-physician-associate collaboration cap works](#), and [independent practice authority eligibility and application].
Andy Silverman is a partner in the Business Department at MacElree Harvey, Ltd. He advises medical practices and providers on business structure and governance, equity and physician compensation arrangements, employment agreements, private equity and M&A transactions, and regulatory and tax matters. Admitted in both Delaware and Pennsylvania, he holds an LL.M. in Taxation from Villanova University School of Law and is a member of the American Health Law Association.
This article reflects Delaware law as of August 4, 2026. The Regulatory Council’s implementing regulations had not been adopted as of publication.
This article is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Attorney advertising.
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