Kansas Corporate Practice of Medicine (CPOM) Overview
- Does Kansas have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In Kansas, the legal stance on corporate practice (CP) was clarified in Early Detection Center, Inc. v. Wilson, where the state Supreme Court determined that general corporations, especially those controlled by non-physicians, are prohibited from providing medical services or engaging licensed practitioners for such services. Consequently, the court declined to enforce a restrictive covenant in an employment agreement between a general corporation and a physician. However, this ruling was refined in St. Francis Regional Medical Center, Inc. v. Weiss. In this case, the court specified that licensed hospitals, irrespective of their status as nonprofit, governmental, or proprietary entities, are permitted to employ physicians. This decision creates an exception to the general rule, acknowledging the unique role hospitals play in the healthcare system and their need to employ medical professionals directly.
- Sources: Kansas Stat. Ann. §§ 65-2803, 65-2837, 65-2867.
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 Kansas CPOM laws
If you're looking to start a healthcare business in Kansas and need to comply with Kansas CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
