Corporate Practice of Medicine (CPOM) 50-State Guide
- MedPath Compliance Group
- Feb 1
- 30 min read
Updated: Apr 1
This guide provides an overview of the Corporate Practice of Medicine (CPOM) laws across all 50 states and the District of Columbia. CPOM laws regulate the ability of corporations or non-physician entities to employ physicians or provide medical services. The primary goal of these laws is to safeguard the physician-patient relationship, ensuring medical decisions prioritize patient care over corporate interests.
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CPOM laws vary significantly by state. While some states strictly enforce CPOM prohibitions, others are more permissive or lack explicit CPOM restrictions. This guide aims to offer a clear, unbiased resource to navigate these complex regulations.
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What Are Corporate Practice of Medicine (CPOM) Laws?
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CPOM laws aim to:
Ensure that clinical decisions are made solely by licensed professionals.
Prevent undue influence of corporate interests on patient care.
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Although these laws predominantly apply to physicians, they often extend to other licensed healthcare professionals, such as psychologists, dentists, nurse practitioners, and physical therapists.
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General Principles of CPOM Laws
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Ownership Restrictions: In CPOM states, only licensed physicians (or licensed professionals) may own or control entities that deliver medical services.
Professional Entities: Most CPOM states require medical practices to be structured as professional corporations (PCs) or professional limited liability companies (PLLCs).
Exemptions: Common exemptions include nonprofit organizations, hospitals, and health maintenance organizations (HMOs).
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State-by-State CPOM Overview (Alphabetical Order)
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Alabama​
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Does Alabama have a CPOM Doctrine?: No.​
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Summary: Alabama does not explicitly prohibit corporations from practicing medicine. However, under Alabama Code § 34-24-51, practicing medicine without a license is unlawful. Clinics can employ physicians provided that employment agreements safeguard the physician’s independent medical judgment. The Alabama Medical Licensure Commission clarified in a 1992 declaratory ruling that corporations may employ physicians if contracts explicitly preserve the physician’s autonomy in clinical decision-making. Additionally, Alabama law prohibits fee splitting, ensuring that payments to or from unlicensed entities do not compromise professional integrity.​
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Sources: Alabama Att'y Gen. Op. No. 2001-089; Declaratory Ruling of the Ala. Med. Licensure Comm'n (1992); Alabama Code § 34-24-51.
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Alaska
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Does Alaska have a CPOM Doctrine?: No.
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Summary: Alaska’s Professional Corporation Act allows corporations to provide professional services, including medical care. However, these corporations must be owned and operated by licensed professionals. The Alaska State Medical Board emphasizes that all decisions regarding patient care must remain under the purview of licensed practitioners to prevent undue corporate influence. Alaska law does not explicitly prohibit corporations from employing physicians, provided that ownership and governance comply with professional licensure requirements.
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Sources: Alaska Stat. § 08.64.170; Alaska Professional Corporation Act (1968).
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Arizona
Does Arizona have a CPOM Doctrine?: Yes.
Summary: Arizona enforces the Corporate Practice of Medicine (CPOM) doctrine primarily through case law, as no explicit statutory prohibition exists against corporate employment of physicians. Key cases, such as Funk Jewelry Co. v. State of Arizona (1935) and State ex rel. Board of Optometry v. Sears Roebuck & Co. (1967), established that corporations lack the "necessary moral and intellectual qualities" to practice medicine or employ healthcare professionals. These decisions emphasize the importance of preserving the autonomy of medical professionals and shielding them from undue corporate influence.Arizona law permits non-licensed individuals to own up to 49% of a professional corporation (PC) offering medical services. However, the majority ownership and control, including at least 50% of directors and the corporation’s president, must be held by licensed physicians. This structure ensures that medical decisions remain under the exclusive purview of licensed professionals.The Arizona Medical Board actively enforces these CPOM principles, investigating and acting against entities that interfere with physicians' independent medical judgment. Although no recent Attorney General opinions address CPOM directly, the regulatory framework emphasizes maintaining professional integrity and prioritizing patient care over corporate interests.
Sources: Arizona Rev. Stat. § 10-3301; Funk Jewelry Co. v. State of Arizona (1935); State ex rel. Board of Optometry v. Sears Roebuck & Co. (1967); Arizona Medical Board regulatory guidance
Arkansas
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Does Arkansas have a CPOM Doctrine?: Yes.
Summary: Arkansas enforces the Corporate Practice of Medicine (CPOM) doctrine through a combination of statutory law and Attorney General opinions. According to Arkansas Code Annotated § 17-95-202, the "practice of medicine" is defined comprehensively, including activities such as diagnosing, treating, prescribing for, or preventing any human disease or condition. Additionally, under Arkansas Code Annotated § 4-29-309(a), corporations are required to obtain a certificate of registration from the Arkansas State Medical Board to operate medical establishments, ensuring that incorporators, officers, directors, and shareholders are licensed under the Arkansas Medical Practices Act. Attorney General Opinion No. 2014-118 further clarifies that while corporations may employ physicians, they must not interfere with the independent medical judgment of these licensed professionals. This opinion emphasizes the importance of maintaining the autonomy of medical practitioners in clinical decision-making.Violations of these statutes and guidelines can result in significant penalties, including the revocation of medical licenses and potential criminal charges. Healthcare entities operating in Arkansas must ensure that their organizational structures and employment practices comply with CPOM regulations to uphold the integrity of medical practice within the state.
Sources: Arkansas Code Ann. § 17-95-202; Arkansas Code Ann. § 4-29-309(a); Attorney General of Arkansas Opinion No. 2014-118
California
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Does California have a CPOM Doctrine?: Yes.
Summary: California enforces one of the most stringent Corporate Practice of Medicine (CPOM) doctrines in the United States, primarily through statutory provisions and reinforced by case law. The Medical Practice Act, specifically California Business and Professions Code § 2400, states that "[c]orporations and other artificial entities shall have no professional rights, privileges, or powers." This provision effectively prohibits unlicensed entities from practicing medicine or employing physicians.The rationale behind this prohibition is to prevent commercial interests from influencing medical decisions, thereby preserving the integrity of the physician-patient relationship. The California Supreme Court, in People v. Pacific Health Corp. (1938), upheld this principle, emphasizing that corporations cannot possess the personal qualifications necessary for medical licensure.Despite the general prohibition, California allows certain exceptions where specific entities can employ physicians without violating CPOM laws. These exceptions include:
Professional Medical Corporations: Under the Moscone-Knox Professional Corporation Act, licensed physicians may form professional corporations to render medical services.
Health Maintenance Organizations (HMOs): Entities licensed under the Knox-Keene Health Care Service Plan Act are permitted to employ physicians to provide care within their networks.
Certain Nonprofit Organizations: Charitable institutions and teaching hospitals may employ physicians under specific conditions, provided they do not interfere with clinical judgment.
Enforcement of CPOM violations in California can result in significant penalties, including fines, license revocation, and criminal charges. For instance, in 2012, Pacific Health Corporation agreed to pay $16.5 million to settle allegations of illegal kickback schemes, highlighting the state's commitment to upholding CPOM principles.
Healthcare entities operating in California must navigate these regulations carefully to ensure compliance. The state's active enforcement and limited exceptions underscore the importance of structuring medical practices in a manner that aligns with CPOM laws, thereby maintaining the autonomy of medical professionals and prioritizing patient care over corporate interests.
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Sources: California Business and Professions Code § 2400; People v. Pacific Health Corp. (1938); Moscone-Knox Professional Corporation Act; Knox-Keene Health Care Service Plan Act; Pacific Health Corporation settlement
Colorado
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Does Colorado have a CPOM Doctrine?: Yes.
Summary: Colorado enforces the Corporate Practice of Medicine (CPOM) doctrine through a combination of statutory provisions and case law. The state's Medical Practice Act, specifically Colorado Revised Statutes § 12-240-138, permits licensed physicians to form professional service corporations (PCs) for practicing medicine, provided these entities are organized and operated in compliance with the Act. This statute ensures that only licensed medical professionals can own and control medical practices, thereby preventing unlicensed entities from influencing medical decisions.Colorado courts have consistently upheld the CPOM doctrine. In Pediatric Neurosurgery, P.C. v. Russell (2002), the Colorado Supreme Court recognized that "it is impossible for a fictional entity, a corporation, to perform medical actions or be licensed to practice medicine." This decision underscores the principle that medical judgments must remain with licensed practitioners, free from corporate interference.Further reinforcing this stance, the Colorado Court of Appeals in Smith v. Surgery Center at Lone Tree, LLC (2020) vacated a substantial medical malpractice verdict, stating that under the CPOM doctrine, the corporate entity could not be held vicariously liable for the malpractice of a physician. The court emphasized that corporations cannot practice medicine and, therefore, cannot be held liable for medical decisions made by licensed physicians.These legal precedents highlight Colorado's commitment to maintaining the independence of medical professionals by restricting corporate entities from practicing medicine or employing physicians. Healthcare organizations operating in Colorado must ensure compliance with CPOM regulations to uphold the integrity of medical practice within the state.
Sources: Colorado Revised Statutes § 12-240-138; Pediatric Neurosurgery, P.C. v. Russell, 44 P.3d 1063 (Colo. 2002); Smith v. Surgery Center at Lone Tree, LLC, 19CA0186 (Colo. App. 2020)
Connecticut
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Does Connecticut have a CPOM Doctrine?: Yes.
Summary: Connecticut enforces the Corporate Practice of Medicine (CPOM) doctrine, which prohibits corporations from practicing medicine or employing physicians to provide medical services. This doctrine is rooted in the state's licensing requirements and has been reinforced through attorney general opinions and case law. Notably, a 1954 Connecticut Attorney General Opinion articulated the state's stance against the corporate practice of medicine, emphasizing that only licensed individuals may practice medicine. To navigate this restriction, Connecticut permits the formation of Professional Service Corporations (PSCs) under Connecticut General Statutes § 33-182bb. These entities allow licensed physicians to render professional services while maintaining compliance with CPOM regulations. Additionally, Public Act No. 09-212, enacted in 2009, established the framework for medical foundations—nonprofit entities organized to provide healthcare services through employed physicians. This act enables certain nonprofit organizations to employ physicians directly, provided they adhere to specific statutory requirements designed to preserve clinical autonomy and prevent undue corporate influence.The Connecticut Hospital Association has noted that while Section 4 of Public Act No. 09-212 addresses aspects of the CPOM doctrine, it does not fully encapsulate the principles set forth in the 1954 Attorney General Opinion and subsequent case law. This indicates that, despite statutory provisions allowing certain corporate structures, the state maintains a cautious approach to corporate involvement in medical practice to safeguard the independence of medical professionals. In summary, Connecticut's CPOM doctrine prohibits general corporations from practicing medicine or employing physicians, with exceptions for entities like PSCs and nonprofit medical foundations that meet specific statutory criteria. Healthcare organizations operating in Connecticut must ensure compliance with these regulations to maintain the integrity of medical practice within the state.
Sources: Connecticut General Statutes § 33-182bb; Public Act No. 09-212; Connecticut Hospital Association Testimony on SB 351
Delaware
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Does Delaware have a CPOM Doctrine?: No.
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Summary: Delaware allows professional corporations to offer medical services provided all shareholders are licensed professionals. While there is no explicit CPOM prohibition, Delaware’s statutes emphasize maintaining professional accountability and limiting fee splitting among healthcare professionals to protect ethical standards.
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Sources: Delaware Code Ann. tit. 24, § 1701 et seq.
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District of Columbia (D.C.)
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Does D.C. have a CPOM Doctrine?: Yes.
Summary: The District of Columbia (D.C.) enforces a Corporate Practice of Medicine (CPOM) doctrine, which restricts corporations from practicing medicine or employing physicians unless explicitly authorized by statute. The CPOM doctrine in D.C. is derived from provisions in the Health Occupations Revision Act of 1985 and subsequent case law. Under D.C. Code §§ 3-1201.02(7)(A), "practice of medicine" includes diagnosing, treating, operating, or prescribing for human health conditions. This statute explicitly reserves medical practice for licensed individuals, effectively preventing corporate entities from engaging in or influencing medical decision-making.A landmark case illustrating this principle is Jordan v. Group Health Association (1939). In this case, the U.S. Court of Appeals for the District of Columbia Circuit upheld the legality of a nonprofit corporation providing medical services, provided that it did not interfere with physicians' independent judgment. This ruling clarified that nonprofit organizations could employ physicians without violating CPOM, as long as clinical autonomy was preserved.The CPOM doctrine in D.C. reflects the district's focus on safeguarding the physician-patient relationship and ensuring that clinical decisions prioritize patient welfare over corporate interests. While exceptions exist for certain nonprofit entities and specific organizational structures, compliance requires careful adherence to statutory requirements and the prohibition against corporate influence over medical practice.
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Sources: D.C. Code §§ 3-1201.02(7)(A); D.C. Code § 29-502; Health Occupations Revision Act of 1985; Jordan v. Group Health Association, 107 F.2d 239 (D.C. Cir. 1939)
Florida
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Does Florida have a CPOM Doctrine?: No (but requires a Health Care Clinic License for non-physician owners).
Summary: Florida does not adhere to a traditional Corporate Practice of Medicine (CPOM) doctrine. Instead, it regulates corporate involvement in healthcare through the Florida Health Care Clinic Act (2003). This act mandates that any medical practice not wholly owned by licensed physicians and seeking reimbursement from third-party payors, such as private insurers, Medicare, or Medicaid, must obtain a Health Care Clinic License. The legislation aims to ensure proper oversight of healthcare clinics, prevent fraud, and maintain patient care standards.Under Fla. Stat. § 400.9935, clinics must meet specific licensure requirements, including:
​Financial accountability to demonstrate the ability to operate.
Background screening for owners and operators.
Appointment of a licensed medical or clinic director responsible for ensuring compliance with applicable healthcare regulations.
Entities exempt from this licensure include clinics:
Wholly owned by one or more licensed healthcare practitioners who actively provide services at the clinic.
Owned by a corporate entity wholly owned by licensed healthcare practitioners.
Noncompliance with the Health Care Clinic Act carries severe penalties, including hefty fines and felony charges for practicing without a license. Enforcement is overseen by the Agency for Health Care Administration (AHCA), which conducts audits and inspections to verify compliance.While Florida does not have a CPOM doctrine prohibiting corporate employment of physicians, its licensing framework effectively regulates medical practice ownership, emphasizing the need for transparency and accountability in healthcare service delivery.
Sources: Fla. Stat. § 400.9935; Florida Health Care Clinic Act (2003); Agency for Health Care Administration Licensing Requirements: ahca.myflorida.com
Georgia
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Does Georgia have a CPOM Doctrine?: Yes.
Summary: Georgia has a nuanced approach to the Corporate Practice of Medicine (CPOM) doctrine. Historically, under O.C.G.A. § 43-34, Georgia restricted the corporate employment of physicians by private corporations. While these explicit statutory prohibitions were repealed in 1982, the principles of CPOM continue to influence legal interpretations and practices in the state. Case law has played a significant role in shaping Georgia’s CPOM framework. For example, in Sherrer v. Hale, 248 Ga. 793 (1982), the Georgia Supreme Court addressed the issue of corporate control and professional independence in medical practices. While the decision did not directly enforce CPOM restrictions, it highlighted the importance of safeguarding the physician-patient relationship and maintaining professional autonomy.Although Georgia does not have explicit statutory CPOM restrictions today, regulatory agencies and courts have maintained that corporations cannot interfere with a physician’s clinical judgment. Additionally, hospitals and nonprofit organizations are generally exempt from these restrictions and are permitted to employ physicians, provided they do not influence medical decision-making.The Georgia Composite Medical Board continues to oversee the licensure and professional conduct of physicians, ensuring compliance with the state’s regulatory standards.
Sources: Georgia Code § 43-34 (regulations related to medical practices and professional conduct); Sherrer v. Hale, 248 Ga. 793 (1982); Georgia Composite Medical Board Guidelines (medicalboard.georgia.gov)
Hawaii
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Does Hawaii have a CPOM Doctrine?: No.
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Summary: Hawaii does not have explicit CPOM restrictions but ensures that corporate entities comply with professional licensing laws. Healthcare providers must operate through professional corporations to maintain accountability and ethical standards.
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Sources: Hawaii Rev. Stat. § 453-2.
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Idaho
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Does Idaho have a CPOM Doctrine?: No.
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Summary: Idaho lacks a specific CPOM statute but prohibits unlicensed entities from employing physicians under legal precedents. The state emphasizes preserving the independence of medical professionals in clinical decision-making.
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Sources: Worton v. Davis, Idaho Supreme Court (1954).
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Illinois
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Does Illinois have a CPOM Doctrine?: Yes.
Summary: Illinois enforces the Corporate Practice of Medicine (CPOM) doctrine, prohibiting corporations from employing physicians unless structured as authorized professional entities. The Medical Practice Act of 1987 (225 ILCS 60/) mandates that only individuals licensed under the Act may practice medicine, effectively barring unlicensed entities from employing physicians.A pivotal case illustrating Illinois' stance is Berlin v. Sarah Bush Lincoln Health Center, 179 Ill. 2d 1 (1997). In this case, Dr. Berlin challenged the enforceability of a restrictive covenant in his employment contract with a nonprofit hospital. The Illinois Supreme Court held that while nonprofit hospitals could employ physicians, they must not interfere with medical professionals' independent judgment. To comply with Illinois' CPOM regulations, medical practices are typically organized as professional corporations (PCs) or professional limited liability companies (PLLCs), where ownership and control are vested in licensed physicians. This structure ensures that clinical decisions remain under the purview of medical professionals, maintaining the integrity of the physician-patient relationship.
Sources: Medical Practice Act of 1987 (225 ILCS 60/); Berlin v. Sarah Bush Lincoln Health Center, 179 Ill. 2d 1 (1997)
Indiana
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Does Indiana have a CPOM Doctrine?: Yes.
Summary: Indiana enforces the Corporate Practice of Medicine (CPOM) doctrine through statutory provisions aimed at preventing non-medical entities from interfering with the professional judgment of licensed physicians. The state's Medical Practice Act, codified in Indiana Code Title 25, Article 22.5, outlines the rules governing the practice of medicine, emphasizing that only licensed individuals may engage in the practice of medicine.Specifically, Indiana Code § 25-22.5-1-2 prohibits unlicensed entities from practicing medicine or influencing clinical decisions. The statute broadly defines "practice of medicine" to include diagnosing, treating, or preventing human illnesses, ensuring that these responsibilities remain solely with qualified professionals.Physicians in Indiana may form professional corporations (PCs) or professional limited liability companies (PLLCs), provided they comply with ownership and governance requirements mandating control by licensed physicians. This ensures that patient care decisions are guided by medical expertise rather than corporate interests, safeguarding the integrity of the physician-patient relationship.
Sources: Indiana Code § 25-22.5-1-2; Indiana State Medical Association: (isma.org)
Iowa
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Does Iowa have a CPOM Doctrine?: Yes.
Summary: Iowa enforces the Corporate Practice of Medicine (CPOM) doctrine through statutory provisions and legal precedents, emphasizing that only licensed individuals may practice medicine. Iowa Code § 147.2 explicitly states that a person shall not engage in the practice of medicine and surgery, among other health professions, without a valid license. In 1992, the Iowa Attorney General issued an opinion clarifying that the employment of physicians by non-professional corporations is generally prohibited, as it may interfere with the professional judgment of physicians. However, exceptions exist for certain nonprofit organizations and professional corporations, provided they do not control or interfere with the physician’s independent medical judgment.
Sources: Iowa Code § 147.2; Iowa Attorney General Opinion No. 92-11-1(L) (1992)
Kentucky
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Does Kentucky have a CPOM Doctrine?: Yes.
Summary: Iowa enforces the Corporate Practice of Medicine (CPOM) doctrine through statutory provisions and legal precedents, emphasizing that only licensed individuals may practice medicine. Iowa Code § 147.2 explicitly states that a person shall not engage in the practice of medicine and surgery, among other health professions, without a valid license. In 1992, the Iowa Attorney General issued an opinion clarifying that the employment of physicians by non-professional corporations is generally prohibited, as it may interfere with the professional judgment of physicians. However, exceptions exist for certain nonprofit organizations and professional corporations, provided they do not control or interfere with the physician’s independent medical judgment.
Sources: Kentucky Revised Statutes § 311.560; State CPOM Doctrines & Nonprofit Exceptions
Louisiana
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Does Louisiana have a CPOM Doctrine?: Yes.
Summary: Louisiana addresses the Corporate Practice of Medicine (CPOM) through the Louisiana State Board of Medical Examiners (LSBME), which issued a Statement of Position in September 1992 (reviewed in March 2001) regarding the employment of physicians by corporations other than professional medical corporations. The LSBME concluded that a physician's employment by a business corporation does not inherently violate the Medical Practice Act, provided that the corporation does not interfere with the physician's independent medical judgment. This position emphasizes that the essence of practicing medicine lies in exercising independent medical judgment, and any corporate employer must not encroach upon this professional autonomy. Violations of these principles can result in disciplinary actions, including license suspension or revocation.While Louisiana permits professional medical corporations and hospitals to employ physicians, it is imperative that these entities refrain from influencing clinical decisions. The LSBME oversees compliance with these standards and is authorized to adopt rules and regulations governing the practice of medicine, as outlined in Louisiana Revised Statutes § 12:914.
Sources: LSBME Statement of Position (September 1992, Reviewed March 2001); Louisiana Revised Statutes § 12:914
Maine
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Does Maine have a CPOM Doctrine?: No.
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Summary: Maine permits physicians to operate through various corporate structures but emphasizes professional accountability. The state requires compliance with licensing laws to ensure ethical practice.
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Sources: Maine Rev. Stat. tit. 13-B, § 1307.
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Maryland
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Does Maryland have a CPOM Doctrine?: Yes.
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Summary: Maryland's Corporate Practice of Medicine (CPOM) doctrine is upheld through common law and interpretations by the Maryland Board of Physicians, despite not being explicitly codified in statute. Under Maryland Code, Health Occupations § 14-101, only licensed individuals can practice medicine within the state. This prohibition is designed to prevent commercial entities from influencing medical judgment and ensure that professional decisions remain in the hands of licensed physicians. Exceptions exist for certain entities, such as hospitals and Health Maintenance Organizations (HMOs), which are statutorily permitted to employ physicians. The Maryland Board of Physicians enforces these principles, ensuring compliance with professional and ethical standards. In its advisory opinions, the Maryland Board of Physicians has reaffirmed that entities employing physicians must not interfere with their independent clinical judgment. Legal commentary, such as that from Gordon Feinblatt LLC, highlights ongoing debates about the need to reform or clarify Maryland's CPOM doctrine, particularly as healthcare delivery models evolve. These discussions emphasize the balance between safeguarding patient care and accommodating modern healthcare organizational structures.
Sources: Maryland Code, Health Occupations § 14-101: (Maryland General Assembly); Maryland Board of Physicians Advisory Opinions: (Maryland Board of Physicians); Gordon Feinblatt LLC – Time to Reform the Corporate Practice of Medicine Doctrine?
Massachusetts
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Does Massachusetts have a CPOM Doctrine?: Yes.
Summary: Massachusetts enforces the Corporate Practice of Medicine (CPOM) doctrine through a combination of statutory provisions and case law. Under Massachusetts General Laws Chapter 112, only individuals who are duly registered and licensed may practice medicine, effectively preventing corporations from employing physicians to provide medical services. This statutory framework is reinforced by the landmark case McMurdo v. Getter, 298 Mass. 363 (1937), where the Massachusetts Supreme Judicial Court held that the right to engage in a lawful occupation, such as practicing medicine, may be qualified or restricted under the state's police power to protect public health and safety. In 2012, the Massachusetts Board of Registration in Medicine finalized regulations specifying the permissible corporate structures through which physicians may practice. These include professional corporations, nonprofit organizations (including hospital services corporations and medical services corporations), limited liability companies, or partnerships. Notably, general business corporations were excluded from this list, reaffirming the state's commitment to the CPOM doctrine.Despite the general prohibition, it has been common practice for nonprofit organizations and licensed entities, such as hospitals, clinics, and skilled nursing facilities, to employ physicians, provided they do not interfere with the physician's independent medical judgment.
Sources: Massachusetts General Laws Chapter 112; McMurdo v. Getter, 298 Mass. 363 (1937); Massachusetts Board of Registration in Medicine Regulations
Michigan
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Does Michigan have a CPOM Doctrine?: Yes.
Summary: Michigan enforces a stringent Corporate Practice of Medicine (CPOM) doctrine, ensuring that only licensed professionals may own or control medical practices. This is achieved through the Michigan Professional Service Corporation Act, which requires entities providing medical services to be structured as professional corporations (PCs) or professional limited liability companies (PLLCs). The doctrine prevents unlicensed individuals or corporate entities from exerting influence over medical practices, thus safeguarding patient care and preserving the independence of medical professionals.The Michigan Attorney General has repeatedly emphasized this principle, most notably in Opinion No. 6592 (1989), which reinforced the prohibition against corporate control of medical practices. The Michigan State Medical Society has also highlighted concerns about the growing influence of corporate interests, advocating for strict adherence to CPOM principles to protect the physician-patient relationship.
Sources: Michigan Professional Service Corporation Act; Michigan Attorney General Opinion No. 6592 (1989); Michigan State Medical Society (msms.org)
Minnesota
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Does Minnesota have a CPOM Doctrine?: Yes.
Summary: Minnesota maintains CPOM restrictions to ensure medical practices are controlled by licensed professionals, preventing undue corporate influence over medical decision-making. Under Minnesota Statutes § 147.081, only qualified individuals may engage in the practice of medicine. The Isles Wellness, Inc. v. Progressive Northern Insurance Co. case reinforced this doctrine, emphasizing the importance of maintaining professional autonomy in medical practices.Exceptions exist for nonprofit organizations and hospitals, provided they do not interfere with physicians' independent judgment. The Minnesota Attorney General Opinion No. 92-B-11 (1955) clarified that nonprofit entities may employ physicians under strict guidelines, ensuring compliance with CPOM principles while allowing organizational flexibility.
Sources: Minnesota Statutes § 147.081; Isles Wellness, Inc. v. Progressive Northern Insurance Co., 703 N.W.2d 513 (Minn. 2005); Minnesota Attorney General Opinion No. 92–B–11 (1955)
Mississippi
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Does Mississippi have a CPOM Doctrine?: Yes (with nuanced enforcement).
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Summary: Mississippi's approach to the Corporate Practice of Medicine (CPOM) is characterized by nuanced enforcement. While there is no explicit statutory prohibition against corporate employment of physicians, the Mississippi State Board of Medical Licensure (MSBML) emphasizes that physicians must maintain independent medical judgment, free from corporate influence. This stance is outlined in the MSBML's policies, which, although not directly prohibiting corporate employment, stress the importance of professional autonomy in clinical decision-making. Notably, the field of optometry in Mississippi adheres to stricter CPOM prohibitions, as evidenced by the case Sears, Roebuck & Co. v. State Board of Optometry, 57 So. 2d 726 (Miss. 1952), where the court upheld the ban on corporate practice in optometry to protect professional integrity.
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Sources: Mississippi State Board of Medical Licensure Policies; Sears, Roebuck & Co. v. State Board of Optometry, 57 So. 2d 726 (Miss. 1952)
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Missouri
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Does Missouri have a CPOM Doctrine?: No.
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Summary: Missouri permits corporate practice of medicine, dating back to a landmark 1907 court ruling allowing hospitals and corporations to employ physicians. This progressive stance distinguishes Missouri from most states. However, corporations must ensure that professional standards and physician autonomy are maintained.
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Sources: State ex rel. Sager v. Lewin, 1907.
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Montana
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Does Montana have a CPOM Doctrine?: Yes.
Summary: Montana prohibits unlicensed entities from employing physicians, ensuring that medical practices are controlled by licensed professionals. This is enforced through the Montana State Board of Medical Examiners' regulations, which classify business arrangements with non-licensed individuals as unprofessional conduct. Although the specific rule, Mont. Admin. R. 24.156.625, was repealed, the Board continues to uphold CPOM principles through its current regulations and policies. Exceptions to this prohibition exist for professional service corporations and certain licensed healthcare entities, provided that physicians retain full control over clinical decision-making.
Sources: Montana State Board of Medical Examiners Rules; Mont. Admin. R. 24.156.625 (repealed)
Nebraska
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Does Nebraska have a CPOM Doctrine?: No.
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Summary: Nebraska does not restrict corporate practice of medicine, allowing corporations to employ physicians. Historical cases and statutes affirm that licensed professionals may operate within corporate structures, provided they adhere to professional standards.
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Sources: State Electro-Med. Inst. v. State, 1905.
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Nevada
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Does Nevada have a CPOM Doctrine?: Yes.
Summary: Nevada enforces strict Corporate Practice of Medicine (CPOM) restrictions through its Professional Corporations Act, which mandates that medical practices be owned and controlled by licensed professionals. Nonprofit medical service corporations and specific hospital arrangements are notable exceptions, provided they comply with statutory guidelines. The Nevada Attorney General has further clarified these restrictions in Opinion No. 2002-10, emphasizing the prohibition of corporate ownership that interferes with medical judgment or professional autonomy. Violations may result in legal and financial penalties, ensuring compliance and preserving the integrity of medical decision-making.
Sources: Nevada Rev. Stat. § 89.040 (leg.state.nv.us); Nevada Attorney General Opinion No. 2002-10
New Hampshire
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Does New Hampshire have a CPOM Doctrine?: No.
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Summary: New Hampshire lacks explicit CPOM restrictions, allowing professional corporations and other licensed entities to provide medical services. Professional accountability remains central to healthcare delivery in the state.
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Sources: New Hampshire Rev. Stat. § 293-A:1.
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New Jersey
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Does New Jersey have a CPOM Doctrine?: Yes.
Summary: New Jersey enforces a strict CPOM doctrine through statutory interpretation and case law. Only professional corporations (PCs) owned by licensed physicians or other licensed professionals may employ physicians. The state's courts have reinforced these principles in landmark cases like Allstate Insurance Co. v. Northfield Medical Center, P.C., which underscored the significant risks of non-compliance. Penalties for violating CPOM laws in New Jersey include potential clawbacks of insurance reimbursements, fines, and possible litigation under the New Jersey Insurance Fraud Prevention Act. These measures aim to protect the physician-patient relationship and maintain ethical medical practices.
Sources: New Jersey Stat. Ann. § 14A:17-2 (njleg.state.nj.us); Allstate Insurance Co. v. Northfield Medical Center, P.C., 228 N.J. 596 (2017)
New Mexico
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Does New Mexico have a CPOM Doctrine?: No.
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Summary: New Mexico does not enforce CPOM restrictions but requires compliance with the Professional Corporation Act for medical entities. Physicians must maintain control over clinical decisions to avoid undue corporate influence.
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Sources: New Mexico Stat. Ann. § 61-6-16.
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New York
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Does New York have a CPOM Doctrine?: Yes.
Summary (Expanded): New York enforces a stringent Corporate Practice of Medicine (CPOM) doctrine that prohibits corporations from employing physicians. This doctrine is rooted in the state's Education Law and Public Health Law, which require that medical practices be owned and controlled solely by licensed physicians or authorized professional entities such as Professional Corporations (PCs) and Professional Limited Liability Companies (PLLCs). These entities are heavily regulated to ensure compliance with New York’s CPOM requirements. Ownership of PCs and PLLCs is restricted to licensed professionals, and these entities must be structured to ensure that clinical decisions remain independent of non-physician influence. New York courts have historically emphasized the importance of maintaining professional autonomy in medical practice, starting with early cases like People v. Woodbury Dermatological Institute (1908). The decision highlighted the potential conflicts arising from corporate involvement in medical decision-making and reinforced the principle that only licensed individuals should control medical care.Additionally, New York’s Public Health Law § 2806 sets strict penalties for noncompliance, including license suspension, financial penalties, and potential civil liability for entities that violate CPOM rules. Exceptions to the doctrine are limited and include certain nonprofit organizations and hospitals, which are permitted to employ physicians under specific conditions that preserve clinical independence.The New York State Education Department plays a significant role in regulating professional entities and enforcing compliance. Filings for forming PCs and PLLCs often undergo rigorous scrutiny to ensure adherence to CPOM principles. Notably, New York has also implemented detailed regulations regarding management agreements between PCs and Management Services Organizations (MSOs), further restricting non-physician control over medical practices.
Key Compliance Challenges:
Complex and time-consuming formation process for PCs and PLLCs.
Strict restrictions on naming conventions and management agreements.
Enforcement risks include clawbacks of insurance reimbursements and penalties for violating Medicaid/Medicare guidelines.
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Sources: New York Educ. Law § 6522; N.Y. Pub. Health Law § 2806; People v. Woodbury Dermatological Institute, 192 N.Y. 454 (1908); Case Law: Berlin v. Sarah Bush Lincoln Health Center (1997); New York Attorney General Opinions on Corporate Practice (AG Opinions); White Paper: "Navigating CPOM in New York" by Nixon Peabody LLP; New York State Medicaid Compliance Guidance
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North Carolina
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Does North Carolina have a CPOM Doctrine?: Yes.
Summary: North Carolina enforces CPOM restrictions through regulatory oversight and statutory provisions. The North Carolina Medical Board prohibits unlicensed entities from employing physicians, emphasizing the importance of maintaining professional independence in medical decision-making. Exceptions exist for certain nonprofit organizations and hospitals, provided that these entities do not interfere with physicians' clinical autonomy. The state actively investigates and enforces CPOM violations, especially in cases involving unlicensed practice or corporate influence over medical decisions.
Sources: North Carolina Gen. Stat. §§ 55B-2, 55B-4; North Carolina Medical Board Regulations
North Dakota
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Does North Dakota have a CPOM Doctrine?: Yes.
Summary: North Dakota's CPOM doctrine explicitly prohibits corporate employment of physicians under the state’s licensing laws. Physicians can operate through professional entities such as Professional Corporations (PCs), provided they retain full control over all medical decisions. The North Dakota Board of Medicine enforces these restrictions, ensuring compliance and preserving professional autonomy. Violations may lead to disciplinary actions, including license suspension or revocation.
Sources: North Dakota Cent. Code § 43-17-31; North Dakota Board of Medicine Policies
Ohio
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Does Ohio have a CPOM Doctrine?: Historically yes, but evolving.
Summary: Ohio has traditionally prohibited the corporate practice of medicine, rooted in case law and statutory interpretation. This doctrine emphasized that only licensed individuals could practice medicine, and corporations were excluded from employing physicians to safeguard clinical autonomy. However, recent legislative changes and evolving interpretations by the Ohio Medical Board suggest a gradual relaxation of these restrictions. Amendments to the Ohio General Corporation Act and Limited Liability Company Act have introduced more permissive frameworks, allowing certain business structures to engage in healthcare under specific conditions. Despite this shift, physicians employed by corporate entities must maintain independence in medical decision-making and comply with ethical standards to avoid professional liability.
Sources: Ohio Rev. Code Ann. § 4731.41(A); Ohio Medical Board Guidance Documents (med.ohio.gov); Ohio Attorney General Opinion No. 87-049 (1987)
Oklahoma
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Does Oklahoma have a CPOM Doctrine?: No.
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Summary: Oklahoma does not restrict corporate practice of medicine, allowing corporate entities to employ physicians. Professional accountability and compliance with broader healthcare laws remain essential.
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Sources: Oklahoma Stat. Ann. tit. 18 § 844.
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Oregon
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Does Oregon have a CPOM Doctrine?: Yes.
Summary: Oregon enforces CPOM restrictions primarily through case law. The landmark case Sisemore v. Standard Optical Co. (1947) established the precedent that corporations cannot employ physicians, emphasizing that professional autonomy must remain with licensed practitioners. State law further stipulates that only professional entities, such as Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs), owned and operated by licensed individuals, can provide medical services. Exceptions to these restrictions exist for certain nonprofit organizations and hospital systems, provided they adhere to guidelines that protect clinical independence. Violations of Oregon’s CPOM laws can result in penalties, including revocation of medical licenses and financial repercussions.
Sources: Oregon Rev. Stat. § 677.100; Sisemore v. Standard Optical Co., 182 P.2d 49 (1947); Oregon Medical Board Policy Statements
Pennsylvania
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Does Pennsylvania have a CPOM Doctrine?: Yes.
Summary: Pennsylvania maintains a strict CPOM doctrine based on long-standing case law, starting with Neill v. Gimbel Brothers, Inc. (1938). This case established that corporations cannot employ physicians or engage in medical practice, citing the importance of preserving the physician-patient relationship and protecting professional judgment from commercial influence. The Pennsylvania Medical Practice Act requires physicians to practice solely through entities they control, such as PCs or PLLCs, ensuring compliance with state regulations. While hospitals and nonprofit organizations may employ physicians, these arrangements are heavily regulated to avoid undue corporate influence. Enforcement actions for CPOM violations often involve penalties, including license suspension or financial restitution.
Sources: 63 Pennsylvania Stat. Ann. § 422.3; Neill v. Gimbel Brothers, Inc., 199 A. 178 (1938); Pennsylvania Department of State Guidance on Professional Entities
Rhode Island
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Does Rhode Island have a CPOM Doctrine?: Yes.
Summary: Rhode Island enforces CPOM restrictions through statutory provisions and regulatory oversight. Professional service corporations (PSCs) and Professional Limited Liability Companies (PLLCs) are the only entities permitted to employ physicians, and these organizations must be entirely owned and controlled by licensed professionals. The Rhode Island Board of Medical Licensure and Discipline monitors compliance, ensuring that clinical decisions remain independent of corporate influence. Exceptions to CPOM laws are limited, generally applying to certain nonprofit healthcare entities. Violations can result in severe penalties, including license suspension and fines.
Sources: Rhode Island Gen. Laws § 7-5.1-1; Rhode Island Board of Medical Licensure and Discipline Reports (health.ri.gov); Rhode Island Attorney General Opinions on CPOM
South Carolina
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Does South Carolina have a CPOM Doctrine?: Yes.
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Summary: South Carolina prohibits the corporate practice of medicine through case law and statutory provisions, emphasizing the preservation of clinical independence and ethical medical practice. Physicians must retain full control over their professional judgment and decision-making, and unlicensed entities are prohibited from influencing medical practice. Notable exceptions include nonprofit hospitals and certain government healthcare entities, which may employ physicians under strict regulations to safeguard autonomy. The South Carolina Board of Medical Examiners oversees compliance and investigates violations. Penalties for noncompliance include license revocation and fines.
Sources: South Carolina Code Ann. § 40-47-10; South Carolina Board of Medical Examiners Guidance
South Dakota
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Does South Dakota have a CPOM Doctrine?: Yes.
Summary: South Dakota enforces strict CPOM restrictions, barring unlicensed entities from employing physicians or providing medical services. Physicians are required to practice through professional entities such as Professional Corporations (PCs) or Limited Liability Companies (LLCs), which must be owned and operated by licensed professionals. The doctrine ensures that clinical decisions remain free from corporate interference. South Dakota courts have upheld these restrictions to protect the integrity of medical practice. The state allows limited exceptions, including nonprofit healthcare organizations, which are closely monitored to ensure compliance.
Sources: South Dakota Codified Laws § 36-4-8.1; South Dakota Board of Medical and Osteopathic Examiners Policy Statements
Tennessee
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Does Tennessee have a CPOM Doctrine?: Yes.
Summary: Tennessee has a robust CPOM doctrine, codified in both statutory law and case law. The state prohibits corporate entities from employing physicians or influencing medical practice, with limited exemptions for nonprofit organizations, hospitals, and certain government entities. The Tennessee Medical Practice Act and related statutes mandate that physicians maintain full control over clinical decision-making. Violations of these laws may result in severe penalties, including criminal charges, license suspension, and fines. The Tennessee Board of Medical Examiners actively investigates and enforces compliance with CPOM regulations.
Sources: Tennessee Code Ann. § 63-6-204; Tennessee Board of Medical Examiners Rules and Guidelines (tn.gov/health); Tennessee Attorney General Opinions on CPOM
Texas
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Does Texas have a CPOM Doctrine?: Yes.
Summary: Texas enforces one of the strictest CPOM doctrines in the United States, with extensive regulations governed by the Texas Medical Board. The Texas Occupations Code prohibits unlicensed entities from employing physicians or practicing medicine, ensuring that physicians retain control over medical decisions. Exceptions to these restrictions include nonprofit healthcare entities, academic institutions, and specific joint ventures with stringent safeguards. The Texas Medical Board actively monitors compliance and investigates violations, which can result in penalties such as license revocation, fines, or criminal prosecution. Physicians practicing in Texas must comply with professional corporation laws to operate legally within the state.
Sources: Texas Occ. Code Ann. § 164.051; Texas Medical Board Regulations; Texas Attorney General Opinions on CPOM
Utah
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Does Utah have a CPOM Doctrine?: No.
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Summary: Utah permits corporate practice of medicine under specific conditions, requiring licensed professionals to maintain clinical autonomy. Professional entities must comply with licensing requirements.
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Sources: Utah Revised Limited Liability Company Act.
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Vermont
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Does Vermont have a CPOM Doctrine?: No.
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Summary: Vermont does not restrict corporate practice of medicine but requires compliance with licensing and ethical standards. Professional corporations are common practice structures.
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Sources: Vermont Stat. Ann. tit. 26, § 1343.
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Virginia
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Does Virginia have a CPOM Doctrine?: No.
Summary: Virginia does not enforce a formal Corporate Practice of Medicine (CPOM) doctrine. Instead, the state permits corporations and other entities to employ physicians under specific conditions, provided that the employed physicians retain full autonomy in clinical decision-making. The Virginia Board of Medicine emphasizes that professional accountability and ethical standards are paramount, even when physicians are employed by corporations. Virginia Code § 54.1-111(D) explicitly states that corporate entities can employ licensed physicians as long as the physician’s professional judgment is not restricted or influenced by non-medical personnel or organizational policies.Exceptions to Virginia’s generally permissive stance include instances where entities or individuals are found to interfere with the independent medical judgment of licensed physicians. Nonprofit organizations, hospitals, and certain healthcare corporations are typically structured to ensure compliance with these principles. Physicians must also ensure that their practices align with the broader ethical and professional standards outlined by the Virginia Board of Medicine.Virginia’s flexible framework makes it a favorable environment for healthcare entities that adhere to regulatory guidelines, but violations—such as evidence of corporate interference—can result in disciplinary actions, license suspensions, or fines.
Expanded Considerations:
Hospital Employment: Virginia hospitals commonly employ physicians under regulatory safeguards, ensuring compliance with professional autonomy standards.
Medical Spas & Aesthetic Practices: The Virginia Board of Medicine closely monitors cash-pay medical practices such as med spas, where physicians must oversee procedures performed by nurse practitioners or physician assistants.
Notable Cases: While Virginia has not seen significant CPOM-related litigation, the Attorney General’s opinions and Board of Medicine guidance frequently address scenarios that could violate the state’s ethical and professional requirements for physicians.
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Sources: Virginia Code § 54.1-111(D); Virginia Board of Medicine Regulations; Virginia Attorney General Opinions on Medical Practice
Washington
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Does Washington have a CPOM Doctrine?: Yes.
Summary: Washington prohibits corporate practice of medicine (CPOM) through case law and statutory provisions, ensuring that only licensed physicians or approved professional entities may provide medical services. Key case law, such as Morelli v. Ehsan and Washington Imaging Services, LLC v. Washington State Department of Revenue, reinforces this doctrine. The rulings emphasize that corporate ownership or employment of physicians is prohibited unless specific exemptions, such as nonprofit hospitals or professional service corporations, apply. To comply with these restrictions, medical practices must operate as Professional Corporations (PCs), Professional Limited Liability Companies (PLLCs), or similar licensed entities. The Washington Anti-Rebate Statute (RCW 19.68.010) also prohibits fee-splitting arrangements, reinforcing the state’s commitment to ethical medical practices.While the state Medical Board is proactive in investigating violations, exceptions exist for hospitals and nonprofit healthcare organizations, provided they do not interfere with physicians’ clinical judgment.
Expanded Considerations:
Hospital Employment: Washington hospitals can employ physicians, but their nonprofit status is often cited as a mitigating factor for CPOM concerns.
Med Spa Practices: Cash-based medical practices, such as aesthetic clinics, are under close scrutiny to ensure adherence to professional oversight standards.
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Sources: Washington Rev. Code § 18.57.005; Morelli v. Ehsan (1988); Washington Imaging Services, LLC v. Washington State Department of Revenue, 171 Wn.2d 548, 252 P.3d 885 (2011); Washington Anti-Rebate Statute, RCW 19.68.010
West Virginia
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Does West Virginia have a CPOM Doctrine?: Yes.
Summary: West Virginia enforces a strict CPOM doctrine under state law and regulatory oversight. Unlicensed entities cannot employ physicians or operate medical practices. Licensed professionals must form Professional Corporations (PCs) or similar entities to deliver medical services. The West Virginia Board of Medicine closely monitors compliance, ensuring that all decisions requiring medical expertise remain under the control of licensed professionals.Exemptions are limited, with nonprofit hospitals and specific healthcare organizations allowed to employ physicians under regulatory safeguards. Violations of the CPOM doctrine may result in license revocation, penalties, or other disciplinary actions.
Expanded Considerations:
Fee-Splitting Prohibitions: West Virginia strictly prohibits fee-splitting arrangements that could undermine professional ethics.
Nonprofit Employment: Nonprofit organizations employing physicians must adhere to clear operational guidelines to avoid CPOM violations.
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Sources: West Virginia Code § 30-3-14; West Virginia Board of Medicine Regulatory Guidance
Wisconsin
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Does Wisconsin have a CPOM Doctrine?: Yes.
Summary: Wisconsin enforces its CPOM doctrine through statutory and case law provisions. According to Wisconsin Stat. § 448.03(1), unlicensed entities cannot employ physicians. The Wisconsin Attorney General has clarified that corporations are prohibited from practicing medicine or employing licensed professionals due to licensing and ethical concerns. Physicians must operate through Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs).The prohibition also addresses the ethical dimensions of medical practice, emphasizing the importance of physician autonomy and preventing undue influence from corporate interests. Violations may result in disciplinary action, including fines and loss of licensure.
Expanded Considerations:
Fee-Splitting Provisions: Wisconsin Stat. § 448.08 prohibits fee-splitting arrangements, ensuring transparent and ethical billing practices.
Professional Autonomy: Wisconsin’s CPOM restrictions safeguard the physician-patient relationship from commercial pressures.
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Sources: Wisconsin Stat. § 448.03(1); Wisconsin Stat. § 448.08; Wisconsin Attorney General Opinion OAG 39-86
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Wyoming
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Does Wyoming have a CPOM Doctrine?: No.
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Summary: Wyoming does not restrict corporate practice of medicine, allowing professional entities to employ physicians. Licensing compliance and professional standards remain critical.
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Sources: Wyoming Stat. §§ 17-3-101 through 104; Wyoming Stat. § 33-26-101.
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Overview of States with CPOM Laws
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Corporate Practice of Medicine (CPOM) laws vary significantly across the United States. While some states, such as California, New York, North Carolina, and Texas strictly regulate corporate involvement in medical practice, others have more permissive or ambiguous rules. These laws aim to protect the independence of medical professionals and prioritize patient care over corporate interests.
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States with CPOM Laws
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As of 2024, 33 states and the District of Columbia have implemented some form of CPOM doctrine. These laws typically limit the ability of corporations or non-licensed entities to employ physicians or control medical practices. The states with CPOM laws include:
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Arizona
Arkansas
California
Colorado
Connecticut
District of Columbia (D.C.)
Georgia
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
Montana
Nevada
New Jersey
New York
North Carolina
North Dakota
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Washington
West Virginia
Wisconsin
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In these states, the restrictions often require medical practices to operate as professional corporations (PCs) or professional limited liability companies (PLLCs), owned and managed by licensed professionals.
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States Without CPOM Laws
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Seventeen states do not have formal CPOM restrictions. However, even in these jurisdictions, other healthcare regulations and professional licensing laws may impose limitations on corporate involvement in medical practice. The states without CPOM laws are:
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Alabama
Alaska
Delaware
Florida (requires Health Clinic License for non-physician owners)
Hawaii
Idaho
Maine
Mississippi
Missouri
Nebraska
New Hampshire
New Mexico
Ohio
Oklahoma
Utah
Vermont
Virginia
Wyoming
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Navigating CPOM Compliance
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Understanding CPOM laws is crucial for healthcare organizations, especially those operating across multiple states. Even in states without formal CPOM laws, structuring practices through a Management Services Organization (MSO)-Professional Corporation (PC) model can help ensure regulatory compliance and minimize risk.
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If you are a healthcare startup or know a digital health founder who needs guidance, reach out to schedule a complementary CPOM Strategy Call. We’ll discuss your compliance strategy and explore ways to align operational growth with evolving state regulations.
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Disclaimer: The information in this article is intended for general informational purposes related to CPOM compliance. While MedPath offers guidance and insights to support healthcare startups, this content should not be interpreted as legal advice. For legal questions specific to your circumstances, consult a licensed attorney.