Do you need an MSO for your ABA practice in New Mexico?

New Mexico's corporate-practice doctrine

The opinion states that "the medicine and surgery statutes pertaining to licensure of physicians, sections 61-6-1 to 61-6-32 NMSA 1978, do not address this question," that "any categorical denunciation of the corporate practice of medicine is not warranted," and that an employing entity "may not engage in conduct amounting to the practice of medicine by exerting lay control of professional medical judgments" (N.M. Att'y Gen. Op. No. 87-39). This is a 1987 view of the statutes then in force. Search also pointed to 2025 SB 450, a proposed Corporate Practice of Medicine Act, whose status was not checked because the legislature site returned HTTP 403. If it was enacted, this answer could change.

Is ABA a licensed profession in New Mexico

No New Mexico behavior analyst license was found. A search of the Regulation and Licensing Department site returned "No Results Found," and Medicaid guidance refers to a technician's "license or BCBA certification" without naming a state behavior analyst license (RLD site search; HCA Supplement 22-02, retrieved in the licensing pass). That is a negative finding from two sources, not a statute. Without a license, there is no practice act ownership rule.

Professional-entity rules and the form of the clinical entity

As the opinion describes it, the Professional Corporation Act "restricts the ability of the corporation to engage in more than one professional service; requires that only licensed officers and employees render professional services; preserves the legal relationships between persons providing professional services and their clients or patients; and restricts the ability of the professional corporation to issue and transfer its shares" (N.M. Att'y Gen. Op. No. 87-39). The Act itself and the professional LLC provisions were not read.

Who is allowed to own the clinical entity

Not verified. With no behavior analyst license and no categorical bar found for physicians in 1987, open ownership of a pure ABA entity looks possible, but this rests on an old opinion. For psychologists, the opinion says the legislature chose to "expressly permit, with limitation, other forms of corporate practice" and cites section 61-9-16(B), whose current text was not read (N.M. Att'y Gen. Op. No. 87-39).

Where the strict rules catch you: in-house diagnostics

The archetypes split here. An ABA-only practice sits outside any behavior analyst practice act. A practice with an in-house psychologist or physician brings the professional corporation rules and the lay control limit from the opinion. Place any such service in its own licensee-owned entity, separate from the ABA entity.

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 clinicians and delivers care. The MSO runs the business. A management services agreement ties them together, and the clinical entity pays the MSO a fee. In many states the MSO exists to solve an ownership problem, because non-licensees cannot own the clinical entity. Whether New Mexico presents that problem for a pure ABA practice depends on the points above, and this guide says which of them could be verified.

When an MSO helps in New Mexico

An MSO is optional and strategic if ABA ownership is open. If a physician or psychologist service is added, the MSO must stay on the administrative side of the lay control line. See the practice expansion and sale hub.

Transaction notice and private equity review

New Mexico's rule 13.2.12 NMAC implements the Health Care Consolidation Oversight Act and "applies to any proposed transactions that involve a New Mexico hospital." A party must submit written notice, and "the parties shall not effectuate a transaction without the written approval of the superintendent." The rule defines a management services organization by cross-reference to the Act and presumes control at 15 percent of voting power (13.2.12 NMAC, effective September 10, 2024). An ABA practice or its MSO is within scope only if a hospital is involved, which was not analyzed. The statute (2024 SB 15) returned HTTP 403, and 2025 HB 586 appears to recompile and amend it, so the current citation and scope are unverified.

How New Mexico would evaluate your arrangement

These are the factors to run, based on what this guide could verify.

Fee-splitting and how to pay an MSO

The opinion describes fee splitting as "expressly defined and ... limited to conduct in the nature of referral fees" under the Medical Practice Act as it stood in 1987 (N.M. Att'y Gen. Op. No. 87-39). It also discusses an out-of-state case that voided a management agreement giving a lay person 66.67% of net profits. Current section 61-6-15 was not read. Whatever a state's own rules say, the safe design for a management fee is a fixed or cost-plus amount set to fair market value and traceable to documented services, not a percentage of clinical revenue tied to patient volume. Where the practice bills Medicaid, the federal anti-kickback statute applies to payments that can be linked to referrals or volume (42 U.S.C. § 1320a-7b(b)).

Keeping clinical control clean

Under the opinion, an employing entity may not exert lay control of professional medical judgments (N.M. Att'y Gen. Op. No. 87-39). Keep clinical decisions with the licensed clinicians and document the management relationship at arm's length. The management company should not hire, supervise, or discipline clinicians on clinical grounds, set treatment hours, or override a treatment plan. That discipline protects the clinical entity in a payor audit or a transaction, and it becomes essential the moment a psychologist or physician joins the clinical chain.

Medicaid ownership disclosure and change of ownership

A Medicaid provider must disclose each person with "an ownership or controlling interest ... totaling five percent or more" and "must notify MAD of any change in the status of these disclosure provisions." A provider must report changes in "corporate name or corporate ownership" and the agency "must receive this information at least 60 calendar days before the change." On a change in ownership, MAD may withhold payment on pending claims unless the new owner or prior provider accepts responsibility for potential overpayments (8.302.1 NMAC, version effective July 1, 2024).

How this connects to the rest of your compliance stack

Ownership rules are one layer. Three others still bind:

• 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 the Medicaid and insurance hub.
• Licensing. The credential each analyst must hold is a separate analysis. See New Mexico licensing and credentialing.
• Entity structure. Choosing direct ownership versus an MSO-plus-entity structure is its own analysis. See entity structures in New Mexico, and the facility licensure and HIPAA hub for what a change of ownership does to facility and records obligations.

Setting it up in New Mexico: the sequence

1. Confirm the current position. Have counsel check the corporate practice statutes and 2025 bills, since this guide read a 1987 opinion.
2. Separate any second profession. Place psychologist or physician services in a licensee-owned entity.
3. Keep control with licensees. Limit the MSO to administrative functions.
4. Price the management fee at fair market value. Fixed or cost-plus, documented, and not tied to referrals.
5. Plan the Medicaid notice. Report ownership changes at least 60 days before they occur.

What this guide could not verify

• Current text of the Professional Corporation Act, section 61-9-16 and section 61-6-15; the 1987 opinion describes older versions.
• Enactment and effect of 2025 SB 450 and HB 586.
• The Health Care Consolidation Oversight Act statute itself.
• Whether the transaction rule ever reaches an ABA-only practice.
• The professional LLC provisions.
• Whether any licensing path for behavior analysts exists beyond the negative finding.

New Mexico MSO variables at a glance

Frequently asked questions