Corporate Practice of Medicine (CPOM) Across the 50 States and D.C. — A Public Educational Guide

About this guide. This is a summary review of current literature and publicly available information about Corporate Practice of Medicine (CPOM) laws as of the date shown. It is provided for general educational purposes only, is not legal advice, and does not create an attorney-client or consultant-client relationship. CPOM rules come from statutes, case law, regulations, attorney general opinions, and medical board policy that change over time and are applied to specific facts; classifications here — including whether a state "has" a CPOM doctrine — are interpretive and can vary among commentators. Confirm any state's current requirements with qualified counsel before relying on them.

The short version

• A majority of jurisdictions recognize some form of CPOM doctrine. By the count most widely used in public 50-state guides, 32 states plus the District of Columbia recognize or enforce a CPOM doctrine in some form, and 18 states do not — though several classifications (Georgia, Mississippi, Montana, Ohio, Maryland, Louisiana, Kentucky, D.C.) are genuinely nuanced and counted differently by different commentators.
• 2024–2026 is a decisive tightening cycle, driven by concern over private equity (PE) and high-profile collapses (Steward Health Care, Prospect Medical). California (SB 351 + AB 1415, effective Jan 1, 2026) and Oregon (SB 951 + HB 3410, staggered 2026/2029) enacted the strictest new controls, while Massachusetts, Indiana, New Mexico, Connecticut, Maine, Colorado, and Illinois added transaction-review or transparency laws.
• Enforcement is now active, not theoretical. In 2026, California's Attorney General filed an amicus brief attacking "friendly PC" stock-transfer and MSA-termination provisions, and announced a CPOM settlement with a dental MSO ($2M in penalties, $300K in restitution, and a 36-month monitor). A dozen-plus states advanced new CPOM/MSO bills in the 2025–2026 sessions.

The national landscape: a shift from passive doctrine to active control

For most of the last century, CPOM was a patchwork of old case law, licensing statutes, AG opinions, and medical-board policy that was rarely enforced against the ubiquitous "friendly PC"/MSO model — a physician-owned professional corporation (PC) contracting with a lay-owned management services organization (MSO) for non-clinical services. Beginning in 2024 and accelerating through 2025–2026, states began codifying and sharpening CPOM, restricting MSO control and ownership overlap, voiding noncompete and nondisparagement clauses, and layering on transaction-notice and review regimes aimed at PE, hedge funds, and REITs. The trend is notably bipartisan, and it was catalyzed in part by the collapse of PE-backed Steward Health Care and the Prospect Medical bankruptcy.

The clearest 2025–2026 leaders are California and Oregon. Oregon's SB 951 (signed June 9, 2025, amended by HB 3410) is widely described as among the most stringent in the country: it bars an MSO and its owners and officers from owning or controlling a majority of a professional medical entity it manages, restricts overlapping ownership and governance, limits share-transfer arrangements, and voids many physician noncompetes — with staggered effective dates (Jan 1, 2026 for new arrangements; Jan 1, 2029 for pre-existing ones). California's SB 351 (effective Jan 1, 2026) codifies CPOM specifically against PE groups and hedge funds, and AB 1415 expands the state's pre-transaction notice regime to cover PE, hedge funds, and MSOs. Most other states that moved did so through transaction review and transparency rather than pure CPOM.

Most states still permit the friendly-PC/MSO structure — but the compliance margin is narrowing, and the more aggressive features of the model (ownership overlap, share-transfer "continuity" agreements, MSO control over billing, coding, and staffing) are exactly what the newest laws and enforcement target.

State-by-state: the interactive table

Sort by any column, filter by CPOM status or recent change, and search by state. The per-state detail expands one state at a time below the table.

What this means for operators and investors

1. Treat California and Oregon as immediate compliance priorities. Both are in effect for new arrangements as of Jan. 1, 2026. Review management services agreements, share-transfer/"continuity" agreements, governance documents, and restrictive covenants. In California, eliminate any MSO right to unilaterally replace a PC's physician-owner (the AG's 2026 amicus brief targets exactly this) and any control over coding/billing, payer contracting, clinically-based hiring/firing, or equipment selection. In Oregon, eliminate prohibited ownership/governance overlap (immediately for new entities; before Jan. 1, 2029 for pre-existing ones).
2. Build transaction-notice lead time into every deal. California, Massachusetts, Indiana, New Mexico, Connecticut, Colorado, and (likely) Illinois now require pre-close filings. Map each target's footprint against these regimes early.
3. Audit restrictive covenants. Noncompete and nondisparagement clauses are void or restricted in California, Oregon, and Colorado — don't rely on them for physicians in those states.
4. Monitor the 2026 sessions in New York, Washington, Vermont, Rhode Island, Pennsylvania, and Connecticut; several would materially change ownership rules or add private rights of action.
5. Re-confirm "nuanced" classifications with counsel. Georgia, Mississippi, Montana, Ohio, Maryland, Louisiana, Kentucky, and D.C. can't be reduced to a clean Yes/No; structure decisions there require state-specific analysis.

Caveats

• Classifications are interpretive and contested. The "32 states + DC / 18 states" split is the most commonly cited framing, but reputable sources disagree at the margins. Treat counts as approximate, not authoritative.
• Statutory citations drawn from secondary sources may be imprecise (section renumbering is common). Verify exact section numbers in the current code before relying on them.
• Pending bills can change substantially or die. Status is stated as of June 20, 2026; several legislative sessions remained active.
• The California AG's friendly-PC position is a non-binding amicus brief, not a binding ruling or regulation; the Art Center Holdings appeal was undecided as of June 2026.
• This guide addresses physician CPOM; rules for dentistry, optometry, and other professions frequently differ within the same state and were noted only selectively.
• For authoritative, citable detail, corroborate against primary law and a comprehensive practitioner reference such as the AHLA Corporate Practice of Medicine: A 50 State Survey.

Need help navigating CPOM across states? If you're expanding a healthcare or digital health company across state lines — or know a founder who is — reach out to schedule a complimentary CPOM strategy call. We'll talk through your structure and how to align it with the current regulatory landscape.

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