Corporate Practice of Medicine (CPOM) Overview
- Does Nevada have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Nevada has a relatively stricter CPOM ban and the Nevada State Board of Medical Examiners is relatively more active in its enforcement of the Nevada CPOM doctrine. Nevada's restriction on the corporate practice of medicine primarily stems from an opinion issued by the Nevada Attorney General. This opinion interprets the Professional Corporations Act, a specific legislative framework that allows medical practice through professional corporations and associations. The Act also states that its regulations take precedence over general corporate laws. Based on this, the Attorney General's opinion concludes that entities other than those defined under the Professional Corporations Act are barred from participating in the practice of medicine in Nevada. Per the Nevada Revised Statute § 89.040, every individual involved in the establishment of the professional entity must possess the requisite authorization to engage in the specific professional service for which the professional entity is being formed. This condition applies, with the exception of situations detailed in subsection 2 of NRS 89.050. It is also worth noting that Nevada has an exception for the CPOM doctrine where medical services corporations are the only nonprofit organizations authorized to offer services delivered by doctors. Nevada's CPOM ban applies to other licensed healthcare professions such as psychology, chiropractic, counseling, therapy, social work, and others.
- Sources: Nevada Rev. Stat. § 89.050; Nevada Rev. Stat § 89.040 (2020); Nev. Att’y Gen. Op. No. 2002-10 (Feb. 26, 2002).
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 Nevada CPOM laws
If you're looking to start a healthcare business in Nevada and need to comply with Nevada CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
