Indiana Corporate Practice of Medicine (CPOM) Overview
- Does Indiana have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Indiana's prohibition against the corporate practice of medicine is codified in its statutes, aimed at preventing non-medical entities from influencing the judgment and ethical duties of healthcare professionals. The statute broadly defines "practice of medicine" to encompass various aspects, including diagnosing, treating, or preventing any human health conditions (IC 25-22.5-1-1.1(a)(1), West 1994). Moreover, the statute expands this definition to include maintaining a place for receiving, examining, or treating individuals with various health issues (IC 25-22.5-1-1.1(a)(2), West 1994). While there isn't specific case law interpreting this, the intention appears to ensure that all health facilities, such as clinics, physician offices, and surgery centers, are considered part of the medical practice. From July 1, 1996, the definition of medical practice in Indiana also includes providing diagnostic or treatment services via telemedicine regularly or under an agreement, specifically to residents of Indiana (IN 25-22.5-1-1(4), P.L. 180-1996). This inclusion aims to accommodate the evolving nature of healthcare delivery, especially in telemedicine. The statute also outlines additional requirements related to the practice of medicine. Dentists in Indiana may only be employed by a dentist-owned entity. The state also has a prohibition against fee-splitting in any way that is not proportional to the professional services rendered.
- Sources: Indiana Code §§ 25-22.5-1-2(c); 25-22.5-8-1.
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 Indiana CPOM laws
If you're looking to start a healthcare business in Indiana and need to comply with Indiana CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
