Georgia Corporate Practice of Medicine (CPOM) Overview
- Does Georgia have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Before 1982, Georgia's law embodied the corporate practice of medicine (CPM) doctrine under O.C.G.A. § 43-34-37(9), restricting physicians' corporate roles to specific hospital or teaching institution affiliations. This regulation was removed in 1982, simultaneously erasing both its restrictions and explicit permissions for physicians employed by hospitals. In the same year, the Georgia Supreme Court hinted at a common law restriction against corporate involvement in learned professions, as noted in Sherrer v. Hale. However, the impact of this decision remains uncertain due to its timing with the legislative changes. The current O.C.G.A. § 43-34-37, now focused on licensure and disciplinary actions, addresses improper professional relationships, unauthorized practice assistance, and prohibitions on fee-sharing with non-medical entities for patient referrals. Since the 1982 repeal, no higher court has specifically addressed the continuation of this CPM doctrine.
- Sources: Sherrer v. Hale 285 S.E.2d 714 (1982); Health Horizons Inc. v State Farm Mutual Auto. Ins. Co. 521 S.E.2d 383 (1999); Ga. Comp. Med. Bd. Monthly Meeting Minutes Executive Director’s Report para. 9 (June 7-8, 2012).
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 Georgia CPOM laws
If you're looking to start a healthcare business in Georgia and need to comply with Georgia CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
