Minnesota Corporate Practice of Medicine (CPOM) Overview
- Does Minnesota have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary: Minnesota enforces a strict prohibition against the corporate practice of medicine (CPOM), rooted in its case law and statutory regulations. This prohibition is based on the interpretation of laws that forbid practicing medicine without a license. As established in the case Granger v. Adson (1933) and reinforced by subsequent statutes, any corporation that is not licensed to practice medicine but employs a licensed physician for its benefit can be considered as unlawfully practicing medicine. This is seen as a violation of both the law and public policy (e.g. a corporation might be influenced by interests outside of patient welfare). However, there are specific legal frameworks under which physicians and healthcare professionals can practice medicine corporately in Minnesota. These are outlined in various statutes: professional corporations (Minn. Stat. Chap. 319A), Integrated Service Networks (Minn. Stat. Chap. 62N), and healthcare cooperatives (Minn. Stat. Chap. 62R). The Minnesota Attorney General has further clarified that nonprofit corporations employing physicians do not necessarily violate CPOM concerns, provided they do not control how the physician treats patients. This perspective, detailed in a 1955 opinion, revises an earlier 1939 stance which suggested nonprofit corporations could also fall under the state's CPOM restriction. For the Medical Board to undertake a CPOM inquiry, a complaint must be initiated, after which the board conducts a fact-finding investigation. Minnesota statutes also outlaw fee-splitting in medicine and in related professions. Medicine may be practice through a professional corporation (PC), LLC, or LLP, provided that the ownership interest is held by licensed professionals of that profession. Minnesota law also explicitly prohibits the corporate practice of dentistry, chiropractic, optometry, and some other licensed healthcare fields.
- Sources: Minnesota Op. Att’y Gen. No. 92-B-11 (Oct. 5, 1955); Isles Wellness inc. v. Progress N. Ins. Co., 703 N.W.2d 513 (Minn. 2005).
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 Minnesota CPOM laws
If you're looking to start a healthcare business in Minnesota and need to comply with Minnesota CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
