Florida Corporate Practice of Medicine (CPOM) Overview
- Does Florida have a Corporate Practice of Medicine (CPOM) Doctrine?: No. But a Health Clinic License is required if a medical practice 1) isn't wholly owned by physicians and 2) bills insurance. This license can be burdensome to get from the Florida Agency for Health Care Administration, and companies may prefer setting up a MSO-Friendly PC model.
- Summary of Current Law: While Florida doesn't have a specific Corporate Practice of Medicine statute, the state passed the Health Care Clinic Act in 2003 to ensure greater physician oversight of medical practices. The Act mandates that medical practices that are 1) not wholly owned by physicians and 2) plan to bill insurance must obtain a Health Care Clinic License. Founding, operating, or owning a health care clinic (or advertising services that require clinic licensure without a license when an exemption does not apply) is a felony under the Act (See Fla. Stat. § 400.9935(4)). Managing a "clinic" (as defined by Florida law) without the proper licensing results in a third-degree felony charge for the first infraction and advances to a second-degree felony for any subsequent infractions. Penalties include up to $5,000 for each day of non-compliance. In Florida, the regulatory framework for healthcare practitioners thus primarily revolves around ensuring physicians' compliance with minimum safety standards, with less focus on specific organizational structures. Optometrists, governed by Section 463.014 of Florida Statutes, are limited to collaborating with licensed healthcare professionals and are prohibited from practicing alongside unlicensed individuals or corporations. Dentists, as outlined in Florida Statutes Section 466.0285, are exclusively permitted to operate dental offices if they hold a valid license. Moreover, Florida Statutes Chapter 621 provides a provision for various professionals, including physicians, to establish professional service corporations. In practice, physician-owned entities typically take the form of professional associations.
- Sources: Ala. Att’y Gen. Op. No. 2001-089 (Feb. 1, 2001); Declaratory Ruling of the Ala. Med. Licensure Comm’n (Oct. 21, 1992). (Statement published by the Florida Board of Medicine acknowledging Florida has not prohibited the corporate practice of medicine).
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 Florida CPOM laws
If you're looking to start a healthcare business in Florida and need to comply with Florida CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
