Many states prohibit or limit the corporate practice of medicine (CPOM), either through statute or common law. These states generally bar a business corporation from practicing medicine or employing a physician to provide professional medical services. As a matter of public policy, the CPOM doctrine intends to ensure that medical decisions are based on the sound and independent judgment of medical professionals. Its purpose is to enable medical professionals to act in the best interests of the patient, without the influence of “corporate owners,” whose goals are presumed to be maximizing their own profits.
The CPOM doctrine has existed since the early 20th century, but its continuing vitality is evidenced not only by periodic litigation, but also by recent scrutiny from state regulatory agencies. My colleagues Andrew Roth and Kim Gold recently published an article about New York’s CPOM doctrine in the New York Law Journal. The article, Corporate Practice of Medicine: An Old Doctrine Breathing New Life, examines the history of the CPOM doctrine, and the litigation and administrative scrutiny that has taken place in New York, demonstrating that the corporate practice of medicine prohibition is alive and well. It also provides practical advice for practitioners advising corporations and other unlicensed entities in structuring transactions which involve the provision of health care to ensure compliance with the CPOM rules.