Massachusetts Corporate Practice of Medicine (CPOM) Overview
- Does Massachusetts have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In Massachusetts, the state has a robust prohibition on the corporate practice of medicine (CPOM), and a physician may not practice under a regular unlicensed corporate entity. The question was resolved by a series of cases before the Supreme Judicial Court of Massachusetts, which later found their way into both statutes and administrative regulations. In common law, the CPOM prohibition is grounded in the requirement that individual physicians must be licensed by the Board of Registration in Medicine under M.G.L. c. 112 §§ 2–12 to practice medicine. Physicians have two primary options for organizing themselves into corporate entities: they can establish professional corporations (PCs) in compliance with M.G.L. c. 156A or form limited liability companies (LLCs) under M.G.L. c. 156C. Entities organized or formed under these statutes must obtain a certificate from the Board of Registration in Medicine (BORIM) as specified in M.G.L. c. 156A §7 (for PCs) or M.G.L. c. 156C §4(c) (for LLCs). If a group is seeking to employ physicians but is not organized according to these rules, it must first obtain a clinic license under M.G.L. c. 111 §51 and 105 CMR 140.000, which can be a labor-intensive process. Alternatively, groups can explore exceptions or exemptions to the clinic licensure regulations. This framework ensures that physicians and medical entities adhere to the state's regulatory requirements for the practice of medicine in Massachusetts. Massachusetts CPOM ban covers medicine, dentistry, and optometry, among other professions. The key case law was developed in the case McMurdo v. Getter (1937) and has been long-standing.
- Sources: Massachusetts Gen. Laws Ch. 176B § 7; 243 CMR § 2.07(22)(a).
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 Massachusetts CPOM laws
If you're looking to start a healthcare business in Massachusetts and need to comply with Massachusetts CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
