Delaware Corporate Practice of Medicine (CPOM) Overview
- Does Does Delaware have a Corporate Practice of Medicine (CPOM) Doctrine?: No.
- Summary of Current Law: In Delaware, while the corporate practice of medicine isn't outright banned, state laws place restrictions on how physicians can operate within corporate entities. Physicians are allowed to form professional corporations under specific conditions, including offering only one type of professional service and ensuring all shareholders hold licenses in the relevant profession. Despite operating within a corporate structure, individuals remain personally liable for their professional actions. Additionally, the statute prohibits dentists, dental hygienists, and optometrists from practicing in certain settings or alongside unlicensed entities to uphold professional standards and protect public welfare. Moreover, Delaware explicitly prohibits referral fees and fee splitting among various healthcare professions to maintain integrity and safeguard against conflicts of interest.
- Sources: Delaware Code Ann. tit. 24, §§ 1701 et seq.
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 Delaware CPOM laws
If you're looking to start a healthcare business in Delaware and need to comply with Delaware CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
