Question 1: Am I practicing medicine?
This is not always an easy question to answer, even though common sense would say it should be. Each state’s idea of what constitutes the practice of medicine is drastically different. In all states, it’s clear that most invasive treatments are the practice of medicine, but what about microplanning, redlight therapy, chemical peels, IV hydration therapy, etc.? Each state takes a different approach. If your medical practice is not practicing medicine, then typically the CPOM doctrine is not relevant, and an MSO approach is not required for CPOM compliance. If you are practicing medicine, then you should continue to Question 2. If you are not sure whether you are practicing medicine, then it is important to consult legal counsel. The question is not always clear and may require researching state laws and rules and what the medical board says.
Question 2: Are all owners physicians?
The second question is to determine if there’s likely an ownership concern. If your business is practicing medicine but all owners are M.D.s or D.O.s, there are likely limited concerns with the ownership structure as related to the CPOM. The reason is that there is limited concern for the physician-owned business interfering with the independent decision making of the practicing physicians. Some states take a similar approach if the ownership structure includes minority ownership of mid-level practitioners. If your business is not owned by physicians, then it’s important to look further into your state’s CPOM doctrine and consider question 3.
Question 3: What is the CPOM Doctrine in my State?
There is a wide variety across the United States of what CPOM requires state to state. Here’s a breakdown of some common CPOM doctrines:
- STRICT (and strict+): Some states are strict and require that all medical practices be owned by physicians with no exceptions (think New York). Some states are what I call Strict+ because they allow non-physician practitioners, such as mid-level practitioners, to own a minority of the business as long as physicians own the majority. (California is a good example of this).
- ALTERNATIVE THINKERS: Some states have an alternative view of the doctrine and focus more on limiting who performs medical services rather than who owns the practice (looking at you, Georgia).
- WHAT’S CPOM?: Other states do not have a CPOM doctrine at all (hi, Florida!). However, there may be CPOM-inspired restrictions, such as restrictions on how fees are shared between physicians and non-physicians.
It is important to consult legal counsel to determine the CPOM doctrine requirements in your state if your medical practice will be owned by non-physicians in whole or in part. Even in strict CPOM states, there may be compliant ways to structure your medical practice, including through setting up a Management Service Organization (MSO).
If you have medical practice set up or CPOM questions or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.
*Disclaimer: Thoughts shared here do not constitute legal advice.