DC enacted behavior-analyst licensure through the Health Occupations Revision General Amendment Act of 2024 (D.C. Law 25-191; DC Code Title 3, Chapter 12), and directed the Mayor to issue rules, so the framework is still being built and BCBA certification is the practical standard meanwhile. The all-licensed rule applies to a professional corporation (DC Code § 29-508), but that form is optional: DC LLCs are governed by the Uniform LLC Act (Title 29, Chapter 8), which imposes no licensed-ownership requirement, so an ordinary LLC may render ABA and a non-licensee may own it. An MSO is therefore optional; the live caveat is the maturing rules, which should be confirmed before forming.
The nine criteria at a glance
- A brand-new licensure framework, still being written
- The District's functional corporate-practice doctrine
- Who is allowed to own the clinical entity
- What a management services organization actually is
- When an MSO makes sense here
- How the District would evaluate your MSO arrangement
- Fee-splitting and how to pay an MSO
- Keeping clinical control on the right side of the line
- How this connects to the rest of your compliance stack
- Setting it up in the District: the sequence
- District of Columbia MSO variables at a glance
- Frequently asked questions
- Where professional advice is essential
A brand-new licensure framework, still being written
The District is the newest entry in this guide on the licensure question. For years DC did not require a license to practice behavior analysis, and BCBA certification was the de facto credential. That changed with the Health Occupations Revision General Amendment Act of 2024, which added behavior-analyst licensure provisions to the DC Code and folded a behavior-analyst seat onto the Board of Psychology (D.C. Law 25-191; DC Code Title 3, Chapter 12, Subchapter VII-G). The act directed the Mayor to issue rules for the licensure and scope of practice of behavior analysis, including a code of ethics, education and training criteria, an examination, and continuing education, within one year. Because those rules are still being developed, the practical credential remains the BCBA, and the licensure mechanics should be confirmed directly with DC Health.
The District's functional corporate-practice doctrine
DC does not have a statute titled "corporate practice of medicine." The Health Occupations Revision Act reserves practice to licensed individuals, and the all-licensed rule for shareholders, directors, and officers applies to a professional corporation (DC Code § 29-508). But that rule binds only if a professional corporation is used; the Uniform LLC Act (Title 29, Chapter 8) imposes no licensed-ownership requirement, so an ordinary LLC may render ABA with non-licensee ownership. What remains is a clinical-control expectation, not an ownership bar.
Who is allowed to own the clinical entity
An ABA practice may use an ordinary LLC under the Uniform LLC Act (DC Code Title 29, Chapter 8), which carries no licensed-ownership rule, so a non-licensee may be a member. The all-licensed rule and continuous-licensure requirement apply only to the optional professional corporation (DC Code § 29-508). Outside capital can therefore hold equity in the practice itself; a management company is one option, not a requirement.
Two things define the District right now: ownership of the practice is tied to licensure, and the behavior-analyst licensure rules are still being written. Build for the ownership rule, and track the rulemaking.
What a management services organization actually is
An MSO is a separate company that provides the non-clinical side of a practice to a clinical entity it does not own. The clinical entity employs the licensed clinicians and holds the license. The MSO employs everyone else and runs the business. A management services agreement ties them together, and the clinical entity pays the MSO a fee. The two are deliberately separate companies contracting at arm's length, not parent and subsidiary.
Professional LLC
- All members licensed (DC Code § 29-508)
- Holds the clinical license
- Employs clinicians, sets treatment
- Bills payors
(fee for services)
MSO (standard LLC or corp)
- Owned by founders or investors
- No clinical services, no ownership limit
- Billing, scheduling, HR, real estate, tech
- Where enterprise value can build
Business and administrative functions
- Billing and collections
- Scheduling and intake logistics
- Real estate, equipment, and facilities
- Technology and data systems
- Non-clinical HR, marketing, finance
Anything that is clinical practice
- Clinical and treatment decisions
- Behavior intervention plans
- Clinical hiring and supervision
- Professional judgment
- Ownership of the clinical license
When an MSO makes sense here
Because a non-licensee may own the clinical entity directly under current law, a founder, operating partner, or private-equity sponsor can hold equity in the practice itself. Many operators still use a management company because it is easier to finance and sell, and in the DC metro area a single MSO can support clinical entities across the District, Maryland, and Virginia, but that is a structuring choice. Confirm the still-maturing 2024 rules before forming. See the practice expansion and sale page for the multistate analysis.
How the District would evaluate your MSO arrangement
If an arrangement is ever questioned, substance controls. These are the factors that decide whether a District structure reads as legitimate or as disguised non-licensee ownership of the practice.
Licensee-only ownership
Are all members of the clinical entity licensed, with continuous licensure maintained (DC Code § 29-508)?
Current on the new rules
Does the structure track the behavior-analyst licensure rules as DC Health finalizes them under D.C. Law 25-191?
Clinical decision authority
Do the licensed clinicians, not the management company, control treatment, assessment, and clinical staffing?
Fair-market-value fee
Does the management fee track the real services delivered rather than sweep the practice's profit to the MSO?
Hiring and firing of clinicians
Does clinical hiring and termination authority sit with the clinical entity rather than the management side?
Federal overlay for Medicaid
For DC Medicaid clients, does the structure satisfy the federal anti-kickback statute?
Fee-splitting and how to pay an MSO
The District does not impose the percentage-fee ban seen in New York, but standard professional-conduct rules against improper fee-sharing and kickbacks apply, and for Medicaid clients the federal anti-kickback statute applies on top (42 U.S.C. § 1320a-7b(b)). Fixed and cost-plus management fees remain the safest and cleanest to defend because they trace to documented services. A percentage-of-revenue fee is not categorically prohibited, but it should be set to the fair market value of real services rather than used to move the practice's profit to the management side.
Keeping clinical control on the right side of the line
The structure holds only while the MSO stays on the business side and the licensed behavior analysts keep genuine authority over clinical decisions, clinical supervision, and professional judgment. The District's functional doctrine treats non-licensee control of the practice as the violation, so write the management agreement to keep clinical control with the licensed owners and keep the two entities genuinely separate.
How this connects to the rest of your compliance stack
Ownership is one layer. Three others interact with it directly, and getting the MSO right does not resolve them:
- Payor and Medicaid disclosure. Your real ownership stack, including any MSO, is disclosed at enrollment and revalidation regardless of how it looks on paper (42 C.F.R. Part 455). See Medicaid and insurance mandates.
- Facility licensure. A change in the ownership or service model can affect facility and records obligations. See facility licensure and HIPAA.
- Entity structure. The PLLC member-licensure rule and the new behavior-analyst rules are their own analysis. See entity structures for ABA practices.
Setting it up in the District: the sequence
- Track the new licensure rules. Confirm the current status of the behavior-analyst licensure rules with DC Health, since they are being issued under D.C. Law 25-191; use BCBA certification as the working credential meanwhile.
- Form the clinical entity. A professional LLC with all members licensed and continuous licensure maintained (DC Code § 29-508; § 29-803.04).
- Form the MSO. A standard LLC or corporation, owned by the founders or investors, providing only non-clinical services. This is where any non-licensee equity lives.
- Paper the management services agreement carefully. Define the services, set the fee to fair market value, keep clinical control with the clinical entity, and avoid any term that functions as non-licensee ownership.
- Plan for the metro footprint. If you also operate in Maryland or Virginia, structure the MSO to support separate, locally compliant clinical entities in each.
- Confirm with District healthcare counsel. The new rules and the management agreement should be reviewed together before any investment.
District of Columbia MSO variables at a glance
| Variable | District of Columbia value |
|---|---|
| Is ABA a licensed profession? | Yes, newly; enacted 2024 (D.C. Law 25-191; DC Code Title 3, Chapter 12, Subchapter VII-G), rules in development |
| Practical credential meanwhile | BCBA certification |
| Corporate-practice doctrine | Functional and implicit, through the licensing statutes (DC Code § 29-508) |
| Non-licensee ownership of the clinical entity | Not permitted; all members must be licensed (DC Code § 29-508) |
| Entity option | Professional LLC (DC Code Title 29; § 29-803.04); no entity-level board approval required |
| Is an MSO required? | Effectively yes for any non-licensee equity; a pure licensee-owned practice needs only the professional entity |
| Percentage management fee | Not banned; fair-market-value fixed or cost-plus is safest |
| Ongoing filing | Biennial report (Form BRA-25) |
| Transaction-notice or PE-review law | None as of June 2026 |
| Key authorities | DC Code Title 3, Chapter 12, Subchapter VII-G; D.C. Law 25-191; DC Code § 29-508; § 29-803.04 |
Frequently asked questions
Do I need an MSO to run an ABA practice in %s?
Is behavior analysis licensed in DC yet?
Can a non-licensed investor own part of my DC ABA entity?
How does the DC metro area affect my structure?
Does the District require notice before a practice sale or investment?
Where professional advice is essential, not optional
The District pairs a licensee-only ownership rule with a licensure framework that is actively being written, so the rulemaking is the thing to track while the entity structure is built. Confirm both with District healthcare counsel before bringing in an outside owner or building an MSO.
The governing authorities to know are the behavior-analyst licensure provisions (DC Code Title 3, Chapter 12, Subchapter VII-G, as enacted by D.C. Law 25-191), the business-organizations licensure rule for professional entities (DC Code § 29-508) and the professional LLC liability provision (DC Code § 29-803.04), with the federal anti-kickback statute (42 U.S.C. § 1320a-7b(b)) layered on for Medicaid.
This page describes general patterns in a regulatory environment that changes, and the District's behavior-analyst licensure rules are actively being written. DC Health, the DC Department of Licensing and Consumer Protection, and qualified counsel provide current requirements. Neither this page nor any secondary source should be relied on in place of direct verification with the relevant authorities and counsel.