Kentucky Corporate Practice of Medicine (CPOM) Overview
- Does Kentucky have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In Kentucky, nonprofit entities that are registered as charitable health care providers are exempt from the prohibitions against the corporate practice of medicine. This exemption allows such entities to provide medical services without violating the doctrine, as long as they maintain their status as charitable providers. Additionally, the Kentucky Medical Board has taken a stance that it will not severely enforce the corporate practice prohibition, provided that the employer (corporate or otherwise) does not interfere with the physician’s independent medical judgment. This stance suggests a more flexible approach towards corporate involvement in medicine, emphasizing the importance of maintaining the independence and integrity of medical decisions made by physicians. The focus is on ensuring that medical practitioners can exercise their professional judgment without undue influence from non-medical corporate entities.
- Sources: Kentucky Rev. Stat. § 311.560; Ky. Bd. Of Med. Op. No. 36 (Feb. 10, 1995).
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 Kentucky CPOM laws
If you're looking to start a healthcare business in Kentucky and need to comply with Kentucky CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
