Iowa Corporate Practice of Medicine (CPOM) Overview
- Does Iowa have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Iowa does not have an explicit statutory ban on the corporate practice of medicine. Instead, this prohibition has developed over time through legal precedent, grounded in the principle that corporations lack the individual qualifications necessary to hold medical or healthcare professional licenses. Unlike some other states where the corporate practice of medicine doctrine is primarily used in disputes between private parties to invalidate contracts or restrictions, Iowa actively employs this doctrine to prevent non-individual legal entities from engaging in certain professions.The Office of the Iowa Attorney General consistently upholds these decisions in its opinions. Despite these general restrictions, the Iowa legislature has enacted provisions allowing specific entities to directly employ healthcare professionals. These entities encompass professional corporations, general and limited liability partnerships, limited liability companies, and health maintenance organizations.Additionally, there is no direct statutory prohibition on fee splitting in Iowa; instead, the state relies on the ethical guidelines established by the American Medical Association (AMA) and the American Osteopathic Association (AOA) to govern this aspect of medical practice.
- Sources: Iowa Code § 147.2; Iowa Att’y Gen. Op. No. 91-7-1 (1992) (republished by the Iowa Board of Medicine August 1, 2015).
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 Iowa CPOM laws
If you're looking to start a healthcare business in Iowa and need to comply with Iowa CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
