Alabama Corporate Practice of Medicine (CPOM) Overview
- Does Alabama have a Corporate Practice of Medicine (CPOM) Doctrine?: No.
- Summary of Current Law: While Alabama doesn't specifically ban businesses from practicing medicine, it does outlaw practicing medicine without a license, as stated in Alabama Code § 34-24-51. In a pivotal decision in October 1992, the Alabama Medical Licensure Commission and the Board of Medical Examiners jointly declared that clinics can hire doctors to treat patients without violating the ban on unlicensed practice, as long as these doctors are contractually bound to make independent decisions in diagnosing and treating patients. This ruling aimed to safeguard patient care, ensuring that only qualified, licensed physicians provide medical services, free from the oversight of non-medically licensed individuals. This stipulation in employment contracts enables doctors to work for a variety of legal entities, including professional, non-profit, and business corporations, as well as partnerships and joint ventures.
- Sources: Alabama Att’y Gen. Op. No. 2001-089 (Feb. 1, 2001); Declaratory Ruling of the Ala. Med. Licensure Comm’n, Oct. 21, 1992).
What are Corporate Practice of Medicine (CPOM) Laws?
CPOM laws are regulations that prohibit standard corporations (or other non-physician entities) from practicing medicine or employing practicing physicians. The primary goal of these laws is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests. These laws vary by state, but they generally aim to protect the physician-patient relationship from commercial influence.
While the focus is often on physicians and medical care, the CPOM family of laws typically apply to a wide range of licensed healthcare providers, including psychologists, speech therapists, physical therapists, occupational therapists, mid-level providers (nurse practitioners and physician assistants), dentists, dietitians, podiatrists, chiropractors, pharmacists, optometrists, and many others. The goal of CPOM laws is shared across these professions: ensure clinical decisions aren’t influenced by corporate pressures.
Who Do These CPOM Laws Apply To?
A state’s CPOM restrictions typically apply to any standard corporate entity that seeks to provide medical or licensed healthcare services. This includes corporations, limited liability companies (LLCs), and other business entities. For an entity to comply with CPOM laws and practice medicine, it typically must be:
- 100% owned by a physician (or physicians) licensed to practice medicine in that state, and
- Formed as a special type of physician-owned legal entity: a Professional Corporation (“PC” for short). In some states, a Professional Limited Liability Company (“PLLC”) is also permitted.
Most states with CPOM laws only permit the corporate practice of medicine through these physician-owned PCs or PLLCs.
Complying with Alabama CPOM laws
If you're looking to start a healthcare business in Alabama and need to comply with Alabama CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
