Telehealth LLC Frequently Asked Questions

While not legally required, forming an LLC is highly recommended for telehealth professionals. It provides crucial liability protection, separating your personal assets from business debts and potential malpractice claims. LLCs also offer tax flexibility and enhance your professional credibility with patients and insurance companies.

Most healthcare professionals should form their LLC in the state where they primarily practice and hold their medical license. This simplifies compliance, licensing, and tax obligations. Popular states for telehealth include Delaware (business-friendly laws), Wyoming (low fees), and Nevada (strong privacy protection). If you treat patients in multiple states, you'll need to register as a foreign LLC in those states.

Costs vary by state but typically range from $500-1,500 in the first year. This includes state filing fees ($50-500), registered agent service ($100-300/year), EIN application (free from IRS), operating agreement ($0-99), and business licenses ($50-500). Using a formation service adds $0-300 but saves time and reduces errors.

Processing times vary by state from 1-15 business days for standard filing. Expedited processing is available in most states for an additional fee (usually $50-200). Factor in additional time for obtaining business licenses, insurance, and credentialing with insurance companies, which can take 60-120 days total.

You need a valid medical license in every state where your patients are located during consultations. The Interstate Medical Licensure Compact allows expedited licensing in participating states. Some states offer special telehealth licenses or temporary permits. Always verify specific requirements with each state's medical board.

The Compact is an agreement between participating states that streamlines the licensing process for physicians practicing across state lines. It allows qualified physicians to obtain expedited licenses in multiple states. Currently, 32+ states participate, but each has specific requirements and fees.

Prescribing regulations vary by state and medication type. Most states allow prescribing for established patients, but many restrict prescribing controlled substances without in-person examination. The DEA requires special registration for prescribing controlled substances via telehealth. Always check current state and federal regulations.

Standard malpractice insurance may not cover telehealth activities. You need a policy that specifically includes telehealth/telemedicine coverage. Coverage should extend to all states where you practice. Typical costs range from $3,000-12,000 annually depending on specialty and coverage limits.

All telehealth LLCs must comply with HIPAA, including: using encrypted, HIPAA-compliant video platforms; implementing administrative, physical, and technical safeguards; conducting risk assessments; training staff; maintaining privacy policies; and signing Business Associate Agreements (BAAs) with all vendors handling PHI.

HIPAA-compliant platforms include Doxy.me, Zoom for Healthcare, SimplePractice, TherapyNotes, and others that sign BAAs. Consumer versions of Zoom, Skype, or FaceTime are NOT HIPAA compliant. The platform must offer encryption, access controls, and audit logs.

Yes, you need BAAs with any vendor or service provider that may access, store, or transmit patient health information (PHI). This includes video platforms, electronic health records (EHR) systems, cloud storage providers, billing companies, and even your registered agent service if they handle patient information.

Obtain written informed consent specifically for telehealth services before the first virtual visit. Consent should cover: technology risks, emergency procedures, prescription policies, technical requirements, privacy measures, and fee structures. Many states have specific consent requirements for telehealth.

Yes, most telehealth practices operate from home offices or shared spaces. Ensure your home office meets HIPAA privacy requirements (private space, secure internet, etc.). Check local zoning laws and homeowner's association rules. You may need a business license even for home-based practices.

Most insurance companies now cover telehealth services, especially post-COVID. You'll need: NPI number, CAQH profile, contracts with insurance companies, billing software or service, and understanding of telehealth-specific CPT codes. Medicare covers many telehealth services with some restrictions.

Requirements vary by state but may include: general business license, professional license (medical), DEA registration (for prescribing), sales tax permit (if applicable), and specialty permits. Some states require specific telehealth business registrations. Check with your state's business licensing department.

LLCs are often preferred for solo practitioners due to simpler management and tax flexibility. Corporations (S-Corp election) may save on self-employment taxes for higher earners. Professional LLCs (PLLCs) are required in some states for medical practices. Consult a CPA familiar with medical practices.

Essential tech includes: reliable high-speed internet (minimum 1 Mbps up/down), HIPAA-compliant video platform, secure EHR system, encrypted file storage, business-grade security software, and backup internet connection. Consider a dedicated business internet line for reliability.

Implement multiple security layers: encrypted video platforms, secure WiFi (WPA3), VPN for remote access, regular software updates, strong passwords/multi-factor authentication, encrypted data storage, secure email for PHI, and staff security training. Conduct regular security risk assessments.

Have contingency plans: backup internet (mobile hotspot), alternative communication methods (secure phone), clear policies for technical interruptions, and procedures for rescheduling. Document any interruptions and how they were handled. Some practitioners maintain backup locations.

While possible, it's risky. Personal devices may not meet HIPAA security requirements. If using personal devices: enable encryption, install business security software, use separate user accounts for business, implement mobile device management (MDM), and have clear BYOD policies. Dedicated business devices are preferred.

Initial costs typically range from $5,000-15,000 including: LLC formation ($500-1,500), malpractice insurance ($3,000-12,000), medical licenses ($500-2,000), technology setup ($1,000-3,000), marketing ($500-2,000), and working capital for first 3-6 months of expenses.

Annual expenses include: LLC maintenance fees ($0-500), registered agent service ($100-300), malpractice insurance ($3,000-12,000), software subscriptions ($1,200-6,000), continuing education ($500-2,000), license renewals ($200-1,000), and accounting/legal fees ($1,000-5,000).

Single-member LLCs are taxed as sole proprietorships by default (Schedule C). Multi-member LLCs are taxed as partnerships. You can elect S-Corp status to potentially save on self-employment taxes. Telehealth practitioners can deduct home office expenses, equipment, software, and professional development costs.

Yes, maintaining separate business and personal accounts is essential for: liability protection, tax compliance, professional credibility, easier bookkeeping, and IRS requirements. Choose a bank that offers business accounts suitable for healthcare practices, preferably with online banking and merchant services.

1) Choose your state and business name, 2) Check name availability with the state, 3) File Articles of Organization with the Secretary of State, 4) Obtain an EIN from the IRS, 5) Create an operating agreement, 6) Get required licenses and insurance, 7) Set up business banking and accounting.

Formation services save time and reduce errors for $0-300 in fees. They handle paperwork, provide registered agent service, and often include compliance tools. DIY filing costs only state fees but requires research and attention to detail. For busy healthcare professionals, services are often worth the cost.

No, forming the LLC is just the first step. You also need: medical licenses in practice states, malpractice insurance, business licenses, HIPAA compliance setup, credentialing with insurance companies (if accepting insurance), and technology infrastructure. Full setup typically takes 2-4 months.

Common mistakes include: not checking multi-state licensing requirements, using non-HIPAA compliant technology, insufficient malpractice coverage, poor internet infrastructure, inadequate privacy safeguards, not understanding prescribing limitations, and failing to maintain proper business records and separate accounts.