Five Steps to Illinois ABA Ownership & Business Structure Compliance by 2027

The Deadline Every Illinois Provider Faces

Almost all applied behavior analysis companies operating in Illinois must be owned entirely by licensed practitioners and be registered with the state as a professional service corporation by January 15, 2027. A company that misses the deadline cannot legally provide ABA services in the state. The requirement comes from Section 150 of the 2022 Behavior Analyst Licensing Act. It applies the state’s long-standing ownership doctrine governing licensed practitioners’ ownership of healthcare companies, which has been law since 1938. This clause puts Illinois alongside New York as the only two states that require ABA businesses to be owned by licensed behavior analysts or other licensed practitioners.

The Illinois Autism Insurance Coalition, a group with over 50 ABA company participants, has worked with state agencies and several law firms on the ownership and business structure requirements and has published a five-step roadmap to compliance. The Coalition warns that providers who accept Medicaid will likely need to finish earlier, by mid to late August 2026, to avoid service interruptions after the deadline. This guide walks through the five steps, defines the legal and business terms behind them, and explains which entity types are exempt from ownership requirements.

What the Acts Actually Require

Two legal frameworks drive the change. The first is the corporate practice of medicine (CPOM) doctrine, a long-standing rule that only licensed professionals, not corporations or unlicensed investors, may own or control a business that delivers patient care. Illinois courts have upheld the doctrine since 1935, the Coalition notes, and the state treats it as a protection for patients and practitioners rather than a measure to improve service quality.

The second is the Professional Service Corporation (PSC) Act, which requires licensed professions, including physicians, lawyers, accountants, and now behavior analysts, to operate through a specific corporate form: a professional corporation (PC) or a professional limited liability company (PLLC).

The law allows only licensed clinicians to own an ABA practice. That group covers licensed behavior analysts (LBAs), licensed assistant behavior analysts (LABAs), and a defined set of related service professionals (RSPs). Under the Coalition’s compliance guidance, the RSPs are speech, occupational, and physical therapists. A behavior analyst may co-own a practice with those clinicians and employ them, but may not co-own with or employ a psychologist or social worker. Physicians are also allowed to own an ABA practice.

The legislature passed the Behavior Analyst Licensing Act in 2022. IDFPR, the Illinois Department of Financial and Professional Regulation, began issuing behavior analyst licenses on January 15, 2025, which started a two-year compliance clock. In May 2026, Senate Bill 712 refined the framework, defining which related service professionals qualify and exempting public and charter schools and nonprofits, according to the Coalition and state legislative trackers.

The Coalition stated they have reached out to 198 ABA companies operating in the state to ensure they have information about the upcoming compliance deadline. All providers are welcome to the Coalition’s weekly drop-ins on compliance; the schedule is available on their website at https://ilasd.com/cpom/.

Step 1: Convert the Direct Service Company to a Professional Service Corporation.

First, convert the company that delivers ABA services into a professional service entity by amending the company’s articles of incorporation with the Illinois Secretary of State. An LLC becomes a PLLC; a standard corporation becomes a PC. This entity, the direct service company, holds all the insurer contracts for treatment services, so keeping it intact carries real value.

Providers amend their articles to add a purpose clause stating that the company renders ABA or behavioral health services, and they can list speech, occupational, or physical therapy as well. They keep the current company name and simply change the entity type, adding the professional service designation. The Coalition lists a $50 filing fee for PLLCs, $150 for PCs, with expedited processing costing more. An LLC converting to a PLLC files Illinois form LLC 5.25 and keeps its existing tax ID; a corporation converting to a PC files form BCA 10.30 and should work to avoid any change to the existing tax ID.

Step 2: Divest Any Unlicensed Owners

Second, per the state’s CPOM doctrine, remove any owners who are not LBAs, LABAs, or approved RSPs. Physicians may also be sole owners. In legal terms, those non-licensed owners must divest, meaning they must sell their equity. A legal document outlining how to divest from the company must be created and approved by all parties, as unlicensed individuals cannot hold an ownership stake in the direct service company. IDFPR can only hold the licensed practitioner to compliance with CPOM and the PSC Act. The approved RSPs are limited to speech, occupational, and physical therapists; a behavior analyst cannot co-own with or employ a psychologist or social worker.

A departing non-licensed owner has three paths after divesting: become an employee of the practice, exit entirely, or form a separate management service organization (MSO). An MSO is an allowable business structure that provides administrative services to the direct service company for a fair market fee for each service. Services can be management services, compliance oversight, claims billing and receivable collections, vendor payables,, insurance negotiations for health, property, and professional liability, real estate negotiations, and human resources all defined under a management service agreement (MSA) Federal anti-kickback and safe harbor laws, which limit payments tied to patient referrals, govern these arrangements, along with Illinois rules against fee splitting, the practice of sharing clinical revenue with a non-clinical party. The Coalition notes that an MSA can give the MSO meaningful financial control, so the licensed owner of the direct service company should negotiate and determine how much the practice (PLLC or PC) remains captive or semi-captive to the MSO.

Step 3: Keep the Tax ID Where Possible

Third, try to keep the company’s Employer Identification Number (EIN), the federal tax ID that payers tie to a provider’s contracts. A new EIN can force a provider to renegotiate insurance contracts from scratch. An LLC moving to a PLLC keeps its EIN automatically, so far. A corporation moving to a PC can usually keep it, too, with careful structuring; the Coalition cites two corporate providers that divested unlicensed owners without changing their EINs. The practice’s National Provider Identifier (NPI), the number used for billing, also stays the same, even though the business type extension attached to it changes.

Step 4: Register the New Entity With IDFPR

Fourth, disclose ownership when registering the new PLLC or PC with IDFPR, the agency that issues licenses for behavior analysts and enforces both the CPOM doctrine and the PSC Act. IDFPR publishes separate registration checklists for PLLCs and PCs, and completing this step puts the restructured company on record with the regulator.

Step 5: Update Contracts With Payers

Fifth, update contracts with insurers. Because the direct service company carries over, most providers keep their existing contracts and file an addendum that adds the new professional service entity, often a simple change in a payer portal such as Availity. Providers whose EIN changes, more likely when something is triggered due to a divested owner or when the corporation becomes a PC, may need entirely new contracts. The Coalition and provider accounts caution that recontracting may bring lower rates or, in some cases, a delay in being welcomed back into a network. However, the Coalition has spoken with payer associations about these upcoming changes and would like providers to inform them of any difficulties in this area.

Who Does Not Need to Restructure

Not every organization has to move through these five steps. The law and its 2026 amendment carve out clear exceptions, and the reasons are straightforward.

Nonprofits and schools are exempt. Senate Bill 712 exempts 501(c)(3) nonprofit organizations and public and non-public schools from the CPOM and PSC requirements. A nonprofit clinic or a school-based program can employ or contract with licensed behavior analysts even when its board or leadership is not licensed, because the exemption removes it from the ownership rule altogether.

All-licensed practices are most of the way there. A company already owned only by LBAs, LABAs, or approved RSPs satisfies the ownership test and does not need to divest anyone. It still must confirm that its corporate form is a PLLC or PC and that its articles name ABA as the professional service, so Steps 1, 4, and 5 may still apply even though Step 2 does not.

Sole owners face the lightest lift. A single licensed behavior analyst who already operates as a PLLC or PC has little left to do. The work that remains is structural, confirming the entity type and registrations, rather than a change in who owns the practice.

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