Maryland Corporate Practice of Medicine (CPOM) Overview
- Does Maryland have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Maryland's stance on the corporate practice of medicine (CPOM) lacks explicit statutes or regulatory provisions, making it somewhat ambiguous. That said, the state's Medical Licensing Board for physicians (The Maryland Board of Physician Quality Assurance), has been clear on its position on this matter in response to inquiries. According to the Board, a corporation can employ a physician to practice medicine in Maryland only if it falls into specific categories, such as a professional service corporation, a hospital, or a health maintenance organization. This position is based on the rationale that the Medical Practice Act permits only licensed individuals to practice medicine, and corporations cannot meet the licensing requirements unless expressly exempted. Thus, Maryland has a common law basis for its corporate practice of medicine prohibition (but it has explicit language in its statutes to exempts hospitals from its CPOM prohibition.) Regulatory enforcement of the Maryland CPOM ban is most likely when the corporate employer interferes with the physician's medical judgment and compromises the standard of care. That said, the Board's official position could also potentially affect unrelated regulatory processes (e.g. pursuing approval from a regulatory board) or be used in disputes involving private parties, such as with a third-party health plan or other payer organization. Meanwhile, the Maryland Dentistry Act (MDA) explicitly outlaws corporate practice of dentistry, and opinions from the Attorney General have confirmed this reading. That said, optometrists can be employed by normal unlicensed corporate entities. In addition to the Maryland CPOM restrictions, the state has fee-splitting prohibitions that affect physicians and other licensed healthcare professionals as well.
- Sources: Maryland Board of Physicians Statement Information on Corporate Issues.
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 Maryland CPOM laws
If you're looking to start a healthcare business in Maryland and need to comply with Maryland CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
