Corporate Practice of Medicine (CPOM) Overview
- Does Connecticut have a Corporate Practice of Medicine (CPOM) Prohibition?: Yes.
- Summary of Current Law: Connecticut has enacted laws restricting the corporate practice of medicine, dentistry, and optometry. These laws are grounded in the state's licensing requirements for healthcare professionals, opinions from the attorney general's office, and relevant case law. A key component of these laws is the prohibition against corporations practicing medicine, with any agreement violating this rule being deemed null and void. This corporate practice of medicine law was formally established in Connecticut through Public Act 09-212 in 2009. While non-profit medical foundations are generally exempt from the corporate practice restrictions, their membership must be comprised of independent practice associations, providers, professional service corporations, or other entities where at least 60% of the ownership and control rests with such independent associations or licensed professionals. The state's statutes provide licensed healthcare practitioners, including physicians and other providers, with significant latitude in selecting a corporate structure for their practice. They can opt to organize as Professional Services Limited Liability Companies (PLLCs), Professional Service Corporations (PCs), or Limited Liability Partnerships (LLPs). These approved business entities are permitted to deliver professional services to the public through their licensed members.
- Sources: Connecticut Gen. Stat. § 33-182bb; State of Connecticut Senate Bill No. 1100, Public Act No. 09-212
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 Connecticut CPOM laws
If you're looking to start a healthcare business in Connecticut and need to comply with Connecticut CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
